How to Calculate Home Loan EMIs_WC

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HowtoCalculateHomeLoanEMI_WC

When one talks about Home Loans, one also hears a lot about EMIs. EMIs, or the Equated Monthly Instalments, are how any loan is repaid over a determined repayment period. The EMI amount is a fixed sum of money that you pay back to your lender, as a part of your repayment process, till the time the whole loan amount is cleared.

The EMI amount has two components:

  • Principal Amount: This is the original loan amount disbursed to you
  • Loan Interest: This is the cost of borrowing the principal amount, which accumulates over the repayment tenor

While these are the primary factors that shape the EMI amount, the loan repayment tenor you choose also determines the size of your EMI. If you repay your loan over a shorter repayment tenor, you may have to pay a larger EMI, but your interest outflow is curtailed. With a longer repayment tenor, on the other hand, your EMIs may be more economical, but your total cost of borrowing will increase.

Assess your financial standing, future goals and current repayment capacity, and choose a repayment tenor that makes the EMI payable manageable.

Calculating your Housing Loan EMI is surprisingly easy and does not involve any complex calculations, thanks to availability of online Home Loan EMI Calculators. However, let’s first look at the bases EMI calculation formula: 

EMI = P x R x (1+R) ^N / [(1+R) ^N-1]

P = Principal amount 

N = Loan repayment tenor in months 

R = Home Loan interest rate (monthly) 

Calculating the Home Loan EMI amount manually can be tedious and lead to more errors. On the other hand, you can use the Home Loan EMI Calculator and get your results in minutes. Here is how you can make optimal use of the online tool:

The calculator window shows you the final EMI amount and the breakup of your total repayment amount down to how much interest you have to pay upon your principal amount. You also have the option of viewing a tentative repayment schedule based on the information you provided. 

Having a repayment schedule prepared before you make your Home Loan application allows you to tailor your Online Home Loan request to your repayment capacity. Here are some other benefits of calculating your Housing Loan EMI beforehand:

  • Helps you choose a feasible Home Loan amount 
  • Helps you pick a comfortable repayment tenor 
  • Helps you plan your finances in advance 

Apply for a Bajaj Housing Finance Home Loan today to benefit from competitive interest rates and favourable lending terms.

*Terms and conditions apply

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