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Make your Financial Planning Easy with Home Loan Calculator

What is a Home Loan Calculator?

With a Loan EMI Calculator, you can calculate the interest amount and the EMIs you have to pay against your home loan. The formula used to calculate your EMI is:

A = [P x R x (1+R)^N]/[(1+R)^N-1], where P is the amount of loan, N is the number of monthly instalments and R is the current home loan interest rate per month.

For instance, say you have availed a home loan of Rs.20 lakh for 5 years at 10% per annum interest. According to the formula, you will arrive at the EMI amount of Rs.42,494. While doing this calculation manually is difficult and prone to errors, an EMI calculator can give you the figure in an instant. Additionally, this calculator will also reveal your total interest as Rs.5,49,645.

How does a Home Loan Calculator Help in Financial Planning?
• It Helps You Forecast your EMIs
As mentioned in the above example, a home loan EMI calculator helps you forecast your monthly EMIs quickly and accurately. This will help you to plan your monthly expenses efficiently.

• It Helps You Choose the Right Lender and Loan Amount
Using this calculator, you can compute the EMI for different offers by various lenders and choose the one that best suits your financial capabilities. For instance, say that lender A offers you Rs.20,00,000 loan for 5 years at 10% rate of interest while lender B offers you Rs.20,00,000 for 6 years at 9% rate of interest. You can use the EMI calculator to know that EMI for lender A is Rs. Rs.42,494 and the EMI for lender B loan is Rs.36,051 while the total interest you pay for lender A is Rs.5,49,645 and that for Lender B is Rs.5,95,680. Considering these results, you can choose to avail a loan from lender B if you cannot afford higher EMIs or A to save on paying additional interest.

Similarly, you can try various interest rate combinations to see which lender’s loan is the most affordable. This calculator can also help you change the loan amount you want to borrow, which can help you find the right home too. For instance, if you see that a loan of Rs.20 lakh is not working out for you even with the lowest interest and highest tenor, you can decrease the principal and do our calculations accordingly.

• It Helps You Choose the Right Tenor
Using the EMI calculator, you can choose the most affordable tenor for your home loan. When you prefer to pay higher EMIs and can afford to do so, you can opt for shorter tenor, but if you wish to pay lower EMIs, you can choose longer tenor to repay your loan. In the given example, if your loan tenor is changed to 4 years, it will increase your EMI by Rs.7,801. This is how you can choose the right tenor with the help of EMI calculator.

Thus, an EMI calculator is an indispensable tool for any prospective homeowner, and helps you compare the various home loan offers with ease. If you are looking to take a new home loan by doing a balance transfer, you can use a balance transfer calculator to see how much you stand to save with lower interest rates.

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Editors' picks

Five Ways You Can Bag Personal Loan Despite Low CIBIL Score
As a personal loan is an unsecured loan, its interest rate, terms, and other features that you can enjoy are heavily dependent on your credit score. A good credit score, one that’s 750 and above, can help you bag the loan amount you need at an affordable interest rate from a reputed lender. However, in some instances your credit score may not be up to mark or you may not have a CIBIL score at all. Despite this scenario, you can still avail a personal loan for low CIBIL score. Here is how you can ensure you get approval.

1. Look for Credit Errors and Rectify Them

Having a serviced loan listed as open or an incorrect credit limit can do a lot of damage to your credit score. Similarly, if a wrong PAN number is mentioned, someone else’s credit history will feature on your credit report! Keep a look out for such errors and raise a request to get mistakes resolved. This way you can improve your credit rating and get a CIBIL score to avail instant personal loan.

If possible, find a way to increase your income to show lenders that you are more than capable of handling loan repayments. Ask your employer for a possible raise if you have been working with the company for a while or consider going after opportunities that promise you a higher salary. You can also consider taking a part-time job to boost your total income and assure the lender that your debt-to-income ratio is within the accepted limit.

3. Apply Jointly

When you take a loan jointly, with a co-applicant, you can showcase a greater repayment capacity and give financial institutions the assurance it seeks. More importantly, if your co-applicant has a good credit score, it can help make up for your lack of score and culminate in loan approval. Ideally, avail a joint personal loan with a family member or your spouse to manage the loan in an easier way.

4. Look Beyond Your Bank’s Offerings

While you may consider your bank to offer you the best loan at affordable interest rates, take a look at other lenders such as NBFCs. Typically, they are more flexible and may consider giving you a loan despite a lower CIBIL score. In fact, you can access many benefits by choosing an NBFC. For instance, Bajaj Finserv Personal Loan offers online applications, online account management, approval within 5 minutes, disbursal within 24 hours, and a flexi loan facility. This allows you to borrow as you need to from the sanction and pay interest only on the used amount. Further, you can opt for interest-only EMIs and repay the principal at the end of tenor.

While you can use a personal loan eligibility calculator to check your eligibility without damaging your credit score, consider viewing a pre-approved offer before you apply for a personal loan. Reputed lenders offer customised loan offerings that are created to suit your unique requirements and your financial abilities.

Keep these interesting facts about CIBIL score in mind if you are seeking a personal loan for low CIBIL score or no credit score. Remember to plan your repayment in advance to ensure that this loan doesn’t impact your score negatively.

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What Are the Different Types of Business Loans in India You Can Go for?
There are more than 42.50 million businesses in India, contributing to 95% of the total industrial output of this country. It employs 106 million people and produces more than 6,000 types of products. The sector has maintained an average growth rate of over 10% every year.

Such massive growth is largely due to the availability of funds in the form of business loans. Several financial institutions in India offer such advances with various customer-centric features and benefits. These advances can help to overcome the challenges small business owners face, finance their purchases and integrate the necessary equipment to improve their production line.

Lenders offer business loan catering to the unique requirements of companies. These products differ in the loan amounts disbursed, tenors, interest rates, repayment schedules and various other aspects.

Primarily, a business loan is available in 4 major variants:

Working capital loans

Working capital is essential to fund a business’ everyday expenses. A business loan for working capital helps a company to pay for raw materials, overhead costs like electricity, rent, water, and other utilities, make payments to suppliers and maintain a healthy financial base.

Working capital loans are essential for businesses that do not enjoy stable revenue throughout the year. SMEs require working capital loans to sustain their everyday operations. Manufacturing businesses should, however, follow certain tips to manage working capital efficiently to keep their production going.

• Machinery loans

Businesses require a substantial amount of funds to purchase or upgrade their plant’s equipment. Most of these tools are imported from foreign countries which increase their price significantly. Now, small and medium scale enterprises often face financial shortage to pay for such new equipment or to train their employees in utilising these tools to boost their production capacity.

In such cases, most of them avail machinery or equipment loans to procure and integrate the latest tools effectively. Financial institutions offer high loan amounts of up to Rs. 30 Lakh to aid companies in covering this financial necessity.

NBFCs provide with unsecured loans to purchase equipment. A borrower need not pledge any collateral, which allows him to repay the advance without any risk of asset confiscation on default.

• SME and MSME loans

SMEs and MSMEs form the backbones of the Indian service sector. They contribute to almost 6.11% of the total manufacturing GDP and 24.63% of service sector GDP. However, despite their input in the manufacturing sector, SMEs and MSMEs suffer from a consistent lack of financing.

To tackle this financial difficulty, MSMEs and SMEs avail additional funds to meet their monetary requirements. Lending companies provide different types of business loans with benefits like affordable rates of interest, Flexi Loan facility, and instant approval within 24 hours. A borrower can also access his loan account online to view important details such as loan statement, repayment date, due amount, etc. Moreover, lenders offer flexible tenors ranging from 12 to 60 months to make repayments easier.

Additionally brings pre-approved offers to make the loan availing procedure simpler and reduce the time consumed considerably. Customers can opt for pre-approved offers on business loans, you only have to share some essential details to check your pre-approved offer.

Furthermore, the eligibility criteria to qualify for such a loan are simple and easy to meet. Lenders also ask for only the basic documents when a borrower applies for credit. Here are the eligibility terms and documents necessary to apply for credit.

Eligibility criteria and documents needed

Financial institutions set simple eligibility criteria and minimum documentation to apply for a business loan. While requirements may vary between lenders, some of the common ones include:

• Age of the applicant – An applicant should be 25 to 55 years of age.
• Business tenor – Business vintage of minimum 3 years is mandatory.
• Tax filing – Applicants have to present income tax returns for at least the past year.

Business loans in India come with a variety of tailor-made features to meet the unique financial requirements of different business owners. These can offer an enterprise the much-needed support for profitability and growth.
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