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Housing Loan Amortization Schedule: Overview
When you avail of a Home Loan, you must repay the borrowed sum (principal) – with interest – over a predetermined period of time (tenor) through pre-fixed monthly instalments, or EMIs. Each EMI remains the same, but the principal and interest components of each instalment keep changing over the repayment tenor.
The Home Loan amortization schedule, as the name suggests, is a schedule that lists your Home Loan repayment through EMIs, detailing the breakup of each EMI in terms of the principal and interest component.
Home Loan amortization refers to the breakup of interest and principal components in each EMI. For any term loan, the interest component remains the highest in the initial EMIs and keeps decreasing over tenor. The principal component increases as one’s loan tenor progress. Due to this balance between these two components, the EMI amount does not vary.
Individuals can find this schedule on their loan-related paperwork. It outlines the entire repayment schedule, along with the division of principal repayment and interest components.
Generally, a Home Loan amortization schedule is represented in the form of a table. Bajaj Housing Finance customers can check various pieces of information about their existing housing credit on such a table. These include:
- Number of instalments: Each EMI would have a corresponding number against it. Borrowers can use this number to track their instalments alongside the interest and principal component for that month.
- Due date: This is the date of each month within which one must pay the EMI to avoid penalties or late payment charges.
- Outstanding principal: A housing loan amortization schedule also lists the principal amount outstanding against each month during the loan repayment tenor.
- Closing principal: After paying each month’s EMI, the remaining outstanding principal amount is given in this column.
- Interest component: The interest paid through each EMI is shown on a Home Loan amortization schedule.
- Principal component: The amount from each EMI that goes toward repaying the principal outstanding is known as the principal component of Home Loan instalment.
An amortization schedule for a Home Loan is similar to that of other term loans. The only major difference is that since Home Loans have a significant repayment tenor, this repayment table tends to be longer and more elaborate.
Bajaj Housing Finance provides a hassle-free way for individuals to calculate and view an amortization table for a Home Loan. Simply navigate to our Home Loan EMI Calculator and enter housing loan details, such as loan amount, tenor and rate of interest, to compute such data.
Using a Home Loan amortization calculator in India is the ideal way to check the liabilities from this credit, even before applying for it. Doing so facilitates ease of financial planning. Such an online tool also helps to determine the best time to avail of a Home Loan Balance Transfer facility on an ongoing housing loan.
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