Purchasing a new home requires a significant investment. And, it is critical that you plan your finances carefully to repay the home loan without any hassles. Read on to know you can use EMI calculator for efficient financial planning.
Today, many financial organisations in India offer home loans at competitive interest rates. While applying for a loan is easy, you must be careful with your financial planning. This plays a vital role in managing the repayment. One of the critical aspects of a home loan is the equated monthly instalment or the EMI. It is the amount that you are obliged to pay the lender every month till the end of loan term.
As a smart borrower, it is advisable to know the exact EMI beforehand. This will help you decide the maximum amount you can afford to borrow so that the repayment is affordable. The best way to determine the EMI is using the EMI calculator for home loan. It is an online tool that helps you calculate the EMI.
Today, almost all the lenders offer EMI calculator for home loan on their website, and they encourage the borrowers to use the same and help them make the right borrowing decision. If you are not sure how it is useful, it can be helpful in the following ways.
- It makes financial calculation easy
If you avoid doing the calculations because you find the process too complicated or feel overwhelmed by it, using the home loan EMI calculator will ease the burden. The tool is easy to use, and it uses a specific formula to compute the EMI for different duration and loan amount. You can change the inputs multiple times, try different permutations and combinations and get instant results every time.
- Provides accurate results
Remember, the primary objective of computing the EMI beforehand is to manage the repayment efficiently. And, by using the EMI calculator you can know the exact amount you must repay. The tool does the calculations based on the input you provide and provides you accurate results. Also, it eliminates the risk of human error that may occur when you do the calculation manually.
- Choose the right lender
This is one of the most significant uses of the EMI calculator. When you compare different home loan offers from different lenders, you may want to approach the one with the best offer that suits your needs. Different lenders have different interest rates. By using the home loan EMI calculator, you can calculate the exact EMI you must repay based on the different interest rates. A comparative analysis will help you choose the right lender.
- Choose the right loan term
The tenure is one of the most critical aspects of a home loan as it has a direct impact on the EMI amount and subsequently affordability. As a borrower, you must remember the rule of thumb, i.e., longer the loan term, lower is the EMI and vice-versa.
Once you know the exact amount you must repay, you can then choose the tenure accordingly based on your repayment capacity. For example, if you foresee a rise in your income, you may be able to pay a higher EMI and choose a loan for a shorter period. However, if you are on a tight budget, and can pay only a specific sum every month, you can opt for a long-term loan so that the EMI is affordable.
Now that you are aware of the various uses of the EMI calculator make sure to use this tool for your home loan planning. It will help you immensely to make an informed borrowing decision.