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Buying a home is indeed a milestone in one’s life. But it is also a decision that affects your present and future. Hence, you need to plan things carefully, especially the financial aspects. Now, you may decide to go with a home loan. After all, it is the most convenient option that protects your liquid assets, all the while ensuring you have the home of your dreams.
But you also have to figure out how the monthly repayments for your home loan can affect your budget and financial standing. This is where a loan EMI calculator comes as a knight-in-shining armour. It is a go-to tool that can simplify your repayment plans. Let’s learn more about this tool in this guide.
What is a Home Loan EMI Calculator?
A home loan EMI calculator is an easy-to-use tool that provides you with an approximate amount you will be paying as your home loan EMI. The home loan EMI calculator uses details such as down payment amount, interest rate, tenure and loan amount to calculate the rough estimate. The tool will also provide an elaborate bifurcation of EMI, including the interest amount and the monthly principal amount.
How do You Calculate Monthly EMIS Manually?
You can also calculate your monthly EMIs using a formula. In fact, this formula is utilised by all home loan EMI calculators to derive the figure.
E = [P x R x (1+R) ^N] / [(1+R) ^N-1]
Where,
E stands for the EMI amount
P stands for the principal amount
R stands for the interest rate
N stands for the loan tenure
Why is it Suggested to Use A Home Loan EMI Calculator Instead?
A home loan EMI calculator is the easy way out. Not only are the calculations complex but they are time-consuming and prone to errors when done manually. So, if you want to save your time and energy, a loan EMI calculator is better. Not to mention, there are several benefits of using a home loan EMI calculator.
- Supports Your Financial Planning
Buying a house is not a small decision. It affects your present and future finances. So, you must have a financial plan that ensures you don’t compromise on your lifestyle while paying your EMIs through the years.
A home loan EMI calculator can come in handy as it can simplify your financial planning. It can offer you an estimate of the amount you will be paying as monthly EMIs. Once you have that number in mind, you can plan your budget accordingly. You will also have a clear idea as to where you must make cuts to compensate for the EMIs.
For instance, if your monthly budget says that you are excessively spending on groceries, a home loan EMI calculator will help you figure out how much you will need to cut down on groceries to ensure you pay your monthly EMIs comfortably.
- You Can Check EMI Affordability
You are going to pay your EMIs for years to come. Not just for another 2 -3 years but 10, 20 or 30 years depending on your financial strength and the cost of your home. So, make sure you are not paying EMIs that only make you struggle financially over the tenure of the loan.
With a home loan EMI calculator, you can estimate the monthly amount and see for yourself if it is affordable for you. For instance, if you make INR 1 lakh per month, but your monthly EMIs are coming out to be INR 60,000, it’s not exactly affordable.
- You Can Use it to Compare Multiple Home Loan Schemes Easily
It is advisable that you don’t go with the first option without researching for more. You must experiment and compare multiple options before you can decide which one suits you the best. With a home loan EMI calculator, you can adjust different variables such as tenure, interest rate, loan amount, margin money, etc, to make financially sound decisions.
Closing Thoughts
A home loan EMI calculator is designed to take a little load off your shoulders. With it, you can easily calculate monthly EMIs. The tool will help not only make your work easier and save time but also simplify your repayment plans.
Whichever lender you choose, ensure that it is a reputed one. Going with a reputed lender is any day better if you are looking for a safe, convenient and hassle-free home loan process. Reach out to Tata Capital if you are looking for a reliable partner. They are a trustworthy brand and will guide you through the complete process.
