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How to Calculate Home Loan EMI

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Before you learn the formula for EMI calculation for a home loan, we want you to know what a home loan is, the benefits accruable to our customers, and how to use the Bajaj Housing Finance Home Loan EMI Calculator. A home loan is a sum of money received by the borrower from a lender, that needs to be paid back with interest.

The home loan is repaid as Equated Monthly Instalments or (EMIs). The property, along with certain original documents, serves as collateral and is kept by the lender as a guarantee that the borrower will repay. The formula for EMI calculation for a home loan is set by your lender based on the principal amount, amount of interest due, and finally, loan duration. From the outset of the loan, a great section of the EMI to be paid is the interest because the principal amount is normally high.

Meanwhile, as the home loan grows, you pay less interest and pay more of the principal amount. To apply for a home loan, you must either be a salary earner or a self-employed businessman. Either way, you must possess a steady source of income. While understanding how to calculate home loan EMI is important, knowing the documents for the home loan application process is equally essential. These documents include:

  • A completed form 
  • Proof of your age
  • Proof of residence
  • Salary slips up to 6 months 
  • Bank statements up to 6 months

A quick tip: While most lenders offer home loans that is to be categorically utilised to buy or construct a new house, Bajaj Housing Finance also offers funds for home renovation of Rs.5 Crore and more, basis eligibility. We also offer the alternative of an adaptable duration of repayment, sometimes up to 30 years. To know what your repayment plan may look like, we advise you use the Bajaj Housing Finance home loan EMI calculator.

Read on to learn the characteristics that determine your home loan eligibility, and how using the Home Loan EMI Calculator would be beneficial to you.

Characteristics that Determine Whether You Qualify for a Home Loan

Several characteristics determine whether you qualify for a home loan. Besides the formula for EMI calculation for a home loan, the characteristics that determine whether you qualify for a home loan or not are: 

  • Lenders expect a certain credit score to grant you a home loan of your desired amount. A score of 750+ is considered strong and should pose no obstacles during your home loan agreement. Anything lesser than that may make your home loan approval process a little tougher than normal.
  • You must possess a steady monthly income. If you are new to your current workplace, your loan application is likely to be declined. A stable income is mandatory to be able to avail of a home loan.
  • Your existing debt obligations also play a significant role in determining your home loan amount, and if the lender deems it too high, you may not be approved for a fresh home loan, as your financial liabilities are already too many.
  • You must also be able to showcase a proof of steady employment.
  • The kind of property to be bought determines whether your application is approved.

The formula for EMI Calculation for Home Loan

The Bajaj Housing Finance Home Loan EMI Calculator employs an easy formula to determine the Equated Monthly Instalment. So, here’s how to calculate the home loan EMI formula: E=[P x R x (1+E)^N]/[(1+R)^N-1]. 

Must Read: Best Home Loan Tenure to Suit Your Pocket

Factors that Influence your Home Loan EMI

They are: 

  • Principal Amount: The principal amount is the sum of money borrowed from the lender. A low principal amount often means that you will pay a low EMI, while a high principal amount means otherwise. 
  • Interest Rate: This refers to the rate at which the lender releases money to you as a loan. It is equal to the EMIs payable on your home loan. 
  • Duration of Loan: This refers to the time given to you to complete your home loan repayment. However, this factor is not like the other factors. Long duration to repay loans means that your EMIs become more affordable, however, in totality – it does not reduce the interest outflow.

A quick tip: A lengthy duration of a home loan means that you pay more interest. 

How to Use the Bajaj Housing Finance Home Loan EMI Calculator

To learn the exact amount due to your lender, Visit to Bajaj Housing Finance's official website, click on “Tools and Calculator” where the option for “Home Loan EMI Calculator” lies. Enter the required information in the respective fields: 

  • Loan amount
  • Rate of interest 
  • Loan duration

Upon supplying the necessary information, the Bajaj Housing Finance Home Loan EMI Calculator estimates the loan amount and displays the result immediately. This takes only a minute to determine. You can use the Bajaj Housing Finance Home Loan EMI Calculator to know where you stand today.


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