While having financial support is crucial for a property purchase, it is also very important for the borrower to think about how they plan on repaying the loan. Since a home loan often involves a huge amount, borrowers need to be sure that they have the means to repay the loan in full. Failing to do so would affect their credit scores, and this is something that should always be avoided.
This is why it is advisable to make use of a home loan EMI calculator before speaking to a lender. If you are not aware of this calculator, here are 7 things to know before using one:
- Formula used to calculate the home loan EMI
The formula used by a home loan EMI calculator to calculate the home loan EMI is:
P x R x (1 + N)^N/(1 + R)^N – 1
In this formula, P is considered to be the principal amount, R is the rate of interest, and N is the repayment tenure of the loan. This formula can be used to manually calculate the home loan EMI too.
- No need of providing any personal details
All that the home loan calculator requires are details regarding the loan plan. It does not ask for any personal details to be shared.
- This calculator can be used for free
This calculator can be used as many times as you want for free. Most lenders make it available on their websites for anyone to freely use. There is no limit to the number of times that this calculator can be used.
- It is simple to operate
For learning about the monthly instalments of the housing loan using a home loan calculator, you need to fill up information regarding details of the housing loan. These include the principal amount of the loan, its interest rate, and the repayment tenure. The calculator will then provide the home loan EMI details.
- You get accurate results
Manually calculating the loan EMI can lead to errors. However, this won’t happen while making use of a home loan EMI calculator. It provides accurate details.
- It helps in considering numerous loan plans
Since you can try out different combinations by changing the details in 3 fields, it is possible to consider numerous plans with the help of a housing loan calculator. Make changes in the principal amount and tenure to understand which plan is more suitable. Using the calculator makes it possible to understand whether the loan interest being offered is affordable or not.
- It displays the EMI results in no time
Manual calculations can take time, which can be a hassle when you are trying to calculate EMIs for multiple loan plans. This is where a home loan EMI calculator will help as it immediately provides the results as soon as you fill up details of the loan plan.
So, make sure to use this calculator before you apply for home loan. Using this online tool can help avoid any repayment problems in the future.