Buying a home is one of the biggest financial decisions you will make in your life. When you decide to buy a home, you decide to build an asset while also ensuring safety and peace of mind for your family. However, with real estate prices soaring, most people can’t afford their dream home without the help of a home loan.
In the last few years, the popularity of home loans has increased significantly for home loans are a safe and convenient way of arranging money to buy a home. However, with increasing demand for home loans, lenders have become stringent regarding home loan approval — not everybody gets approved. Banks and NBFCs have started setting strict eligibility criteria to ensure there is no scope for bad loans or loan default. Aspiring loan borrowers must, therefore, plan their application well and ensure they meet all the eligibility requirements set by a lender. A home loan EMI Calculator comes in handy in this regard. A home loan calculator does not only tell you the amount you qualify for but also gives you an idea of the EMI amount you will have to pay for a specific loan amount.
Must use Tool Before Applying for a Home Loan
So, what is a home loan EMI Calculator? A home loan EMI Calculator is a handy tool that almost all lenders host on their websites. This tool allows aspiring home borrowers to calculate their tentative EMIs for a specific loan amount. The calculator requires one to input only three values: required loan amount, desired loan tenor, and the rate of interest your lender is willing to offer you. If you are planning to take a home loan, you must use the home loan EMI calculator. Here’s why.
Benefits of Using a Home Loan EMI Calculator
Helps with Lender Comparison
Planning to take a home loan? Talk to as many lenders as possible and get offers from each of them. Once you have all the offers, use a home loan EMI calculator to compare these offers and see going with which one will allow you to save the most in terms of the total interest outgo in the long run. In the end, go with the lender offering you the best loan deal, in terms of interest rate as well as added services and features and benefits.
Allows You to Avoid Payment Defaults
A home loan EMI calculator allows you to avoid payment defaults by telling you your tentative EMIs in advance as well as providing you with a repayment schedule. Once you know your EMIs and have your repayment schedule in hand, you can plan your monthly budget in such a way that you always have enough money to pay your EMIs on time.
It Makes Calculations Easier
Have you seen the formula that is used to calculate EMIs?
To calculate your monthly EMIs, you will have to use this formula
EMI= Px R x (1+R)^N / [(1+R)^N-1]
P = Principal loan amount
N = Loan tenor in months
R = Monthly interest rate
One look at this formula and you know that if you use it to calculate your EMIs manually, you are bound to make errors and when it comes to a big-ticket and long-term loan, such as a home loan, there is no room for errors.
A home loan EMI calculator makes it easy for you to perform complex calculations so, you must use a home loan calculator before applying for home loan. Further, a home loan EMI calculator does not leave any scope for errors and therefore, you can trust the results for accuracy every single time.
It is Quick and Secure
The biggest advantage of a home loan EMI calculator is that it is quick. Just input the required values and the calculator will give you results in just a fraction of a second. Since the calculator is so quick, you can use it again and again until you have arrived at an EMI figure against a loan amount that works best for you. Further, home loan calculators are safe. Whatever information you put in the calculator won’t be shared with anyone.
One Can Use it On the Go
One can use a home loan EMI calculator to plan their loan journey at any time and from anywhere. All one needs is a good internet connection.
A home loan EMI calculator is a handy tool that not only allows you to figure out the loan amount you qualify for but also lets you plan your loan repayment journey with a lender in advance. The tool reduces the possibility of bad loans, which is a good thing for both lenders as well as borrowers. So, if you are planning to avail yourself of a home loan, do not forget to use a home loan EMI calculator first.