6 Benefits of the Home Loan EMI Calculator

The popularity of Home Loans has grown immensely over the last few years, primarily because of the many, many benefits associated with these loans. Home Loans allow individuals to build assets without exhausting their savings. These loans come with a long repayment period and low-interest rates, which makes them the most affordable of all loans. However, Home Loans are big-ticket loans and a big commitment. Therefore, anyone planning to avail of a housing loan must take the plunge only after proper financial planning. In the absence of financial planning, a Home Loan can become a burden. A Home Loan EMI calculator helps greatly in this regard. In this article you should know all about the Benefits of Home Loan EMI Calculator. By using a Loan EMI calculator, you can.

Home Loans are repaid in the form of EMIs or equated monthly instalments. EMIs constitute an interest component and a principal component. During the initial years of a loan, the interest component is much higher than the principal component. As time passes, the interest component reduces, and the principal component goes up.  

If you want to calculate your EMIs concerning a specific loan amount, you will have to use this formula for EMI calculation for a Home Loan: 

Home Loan EMIs = P x R x (1+R)^N / [(1+R)^N-1]  

Here,  

P refers to the principal loan amount, N is the loan tenor is months and R is the applicable monthly interest rate.   

N = Loan tenor in months 

R = Monthly interest rate 

The Home Loan EMI calculation formula is a tricky formula with scope for many errors. Thus, when borrowers avail of a Home Loan, they are advised to use a Home Loan EMI calculator to understand their EMI obligation concerning the loan amount they wish to avail of.  

Also Read: How to Calculate Home Loan EMI 

Benefits of the Home Loan EMI Calculator

Here are 6 key benefits of using an EMI calculator for your finances. 

It Makes Calculating EMIs Easy

We just looked at the formula for Home Loan EMI calculation. The formula is tricky and using it to calculate EMIs can prove to be a daunting task. 

Further, when you decide to take a Home Loan, figuring out the right EMI requires you to try out various combinations of the loan amount, tenor and rate of interest. If you are calculating EMIs manually, trying different combinations would require you to use the formula again and again, which is a near-impossible task. A Home Loan EMI calculator makes calculating EMIs easier. With a calculator at your disposal, you can calculate EMIs as many times as possible without feeling mentally drained.  

You Can Use It Anytime and Anywhere

Yet another big advantage of a Home Loan EMI calculator is that this handy tool is available everywhere online. All you have to do is search for the Home Loan EMI calculator and you will get a hundred different results. Further, to be able to use the calculator, all you need is a phone and a decent internet connection -- if you have that, you can use the calculator anytime and anywhere.

It Helps You Decide on the Right Loan Offer for You

If you are planning to avail of a Housing Finance, you must talk to as many lenders as possible and take offers from each one of them. Once you have all the offers, use a Loan EMI calculator to figure out which Home Loan deal would prove to be ideal for you. In the absence of a Home Loan calculator, comparing Home Loan deals would require one to calculate EMIs for various offers manually. This isn't only mentally exhausting but also time-consuming. With this EMI calculator, you can compare as many offers as you like.

It Helps You Decide the Right Loan Tenor for You

A Home Loan is a long-term commitment. It is, therefore, crucial that you choose a tenor and EMI combination that will allow you to repay your loan comfortably. Opting for a long tenor would make your EMIs affordable but would increase your total interest outgo. On the other hand, keeping the tenor short helps one save on the total interest outgo but can make EMIs hard to pay. A Home Loan calculator allows an individual to try out various combinations of tenor and EMI until they have reached a combination that allows them to keep their EMIs affordable while also saving considerably on the total interest outgo.

Also Read: Pick the Best Home Loan Tenor  

It Makes Financial Planning Easier

A Home Loan is at least a 15 to 20 year-long commitment. Therefore, one must avail themselves of a Home Loan only after proper financial planning. A Home Loan EMI calculator facilitates this planning by giving you your monthly EMIs. Once you know your EMI obligation, you can plan your monthly budget in such a way that you always have enough money to cover all your EMIs. Further, if you are planning to make prepayments to close the loan early, a Home Loan calculator will tell you how part prepayments will help you become debt-free sooner and what would be the ideal time to make these payments.

It Helps You Save Time

Calculating EMIs is no easy task. The calculations require you to use a tricky formula and are often time-consuming. When you use a Housing Loan EMI calculator, you save a lot of time, which you can use for other purposes. 

Final Words

In conclusion, a Home Loan calculator is a handy tool that is quite easily available these days. If you are planning to embark on a Home Loan journey, make sure to use this tool to your best advantage. If you are confused about which EMI calculator to use, we recommend the Bajaj Housing Finance Home Loan EMI calculator.

Also Read: How to Calculate the Interest Rate on Home Loans?