How to Calculate Home Loan EMI-Banner_WC

Banner-Dynamic-Scroll-CockpitMenu_HomeLoan

Resources_HowtoCalculate_HL_EMI_Article_Details_WC

5 Mins 14 Jun 2022
how to calculate home loan emi
Highlights
  • What is a Home Loan EMI?
  • How to Use the Bajaj Housing Finance Home Loan EMI Calculator?

What is a Home Loan EMI?

A Home Loan EMI is the amount you pay every month towards the repayment of your Home Loan. EMIs are pre-decided based on several loan parameters.

The formula to calculate the EMI for a Home Loan is based on the principal amount, the interest rate, and finally, the loan duration.

Aspiring homeowners can use our Home Loan EMI Calculator to calculate their tentative EMIs based on their Home Loan requirements. This will help them get an idea of how feasible their required Home Loan amount would be in terms of repayment. 

Also Read: 5 Strategies to Manage High Home Loan EMIs Effectively 

Formula to Calculate Home Loan EMI

The Bajaj Housing Finance Home Loan EMI Calculator uses an easy formula to determine the Equated Monthly Instalment. Here’s the formula to calculate the Home Loan EMI: 

EMI= [P x R x (1+R) ^ N]/[(1+R) ^ N-1]

 

Let us understand how to use this formula to calculate the EMI with an example. If someone takes out a Home Loan of Rs.15 Lakh at an annual interest rate of 8.50%* p.a. for a tenor of 15 years (180 months), the EMI can be calculated using the formula:

 

EMI= [P x R x (1+R) ^ N]/[(1+R) ^ N-1]

Where:

P is the principal loan amount, which is Rs.15,00,000.

N is the loan tenor in months, which is 180 months.

R is the interest rate per month, which is 8.5/12/100 = 0.00708

Therefore, EMI = [15,00,000 x 0.00708 x (1 + 0.00708)^180]/[(1 + 0.00708)^180 – 1] = Rs.14,841.

How to Use the Bajaj Housing Finance Home Loan EMI Calculator

Visit the official Bajaj Housing Finance website, look for 'Calculator' on the panel, and select ‘Home Loan EMI Calculator.’ To calculate your Home Loan EMIs, enter the following details: 

  • Loan amount: It is the total loan amount you want
  • Loan duration: This refers to the time given to you to complete your Home Loan repayment
  • Rate of interest:  It is the cost of borrowing the principal loan amount 

Also Read: Know Why Paying Home Loan EMI Is Better than Renting a Home 

Once you input the above details, the Home Loan EMI Calculator estimates the loan amount and displays the result immediately. You can also use the EMI calculator to gauge the status of your current Home Loan. 

*Terms and conditions apply

Factors that Affect Your EMI Amount

Some of the factors that affect your monthly instalments are:

  •  Loan Amount: The principal loan amount significantly impacts the EMI. Higher loan amounts may result in higher EMIs. However, the EMIs are subject to change based on other factors.
  •  Interest Rate: The interest rate charged by the lender is another significant factor. Higher interest rates lead to higher EMIs and vice versa. Even a small change in the interest rate can significantly affect the EMI amount over the loan tenor.
  •  Loan Tenor: The duration for which the loan is taken, known as the tenor, plays a significant role. Longer tenors typically result in lower EMIs but higher overall interest payments, while shorter tenors lead to higher EMIs but lower total interest payments.

Benefits of Calculating Home Loan EMIs

Calculating EMIs preemptively can help borrowers assess their financial commitments in the following ways:

  •  Firstly, it helps in determining the optimal loan amount and repayment plan aligned with one's financial capacity, mitigating the risk of defaulting on repayments and incurring late fees.
  •  Secondly, by estimating EMIs beforehand, individuals can effectively budget their monthly finances, ensuring they allocate sufficient funds to cover loan repayments without compromising essential expenses.
  •  Thirdly, comparing loan offers enables borrowers to select the most advantageous terms, fostering informed decision-making and financial stability.

Blog-Intro-Disclaimer

DISCLAIMER:

While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent errors or delays in updating the information. The material contained in this website and on associated web pages, is for reference and general information purposes, and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. Neither Bajaj Housing Finance Limited nor any of its agents/associates/affiliates shall be liable for any act or omission of the Users relying on the information contained on this website and on associated web pages. In case any inconsistencies are observed, please click on contact information.

Asset Publisher

Content with tag home loan .

Trending Articles
alt
home+loan Home Loan

[N][T][T][N][T]

All About Home Loan Balance Transfers
2024-06-04 | 4 mins
alt
home+loan Home Loan

[N][T][T][N][T]

Types of Home Loan Charges
2024-01-22 | 3 Min
alt
home+loan Home Loan

[N][T][T][N][T]

All You Need to Know About Home Loans
2023-01-19 | 5 min
alt
home+loan Home Loan

[N][T][T][N][T]

How to Pay Off Your Home Loan Quicker
2024-03-11 | 4 Min
alt
home+loan Home Loan

[N][T][T][N][T]

6 Ways to Reduce Your Home Loan Interest
2024-03-20 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

Advantages for First-Time Home Buyers
2023-07-14 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

Home Loan Terminologies 
2024-06-01 | 3 min
alt
home+loan Home Loan

[N][T][T][N][T]

Home Loan Burden Management: Five Tips
2022-06-27 | 3 min
alt
home+loan Home Loan

[N][T][T][N][T]

A Complete Guide for Home Loan Insurance
2023-04-03 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

Benefits of a Home Loan
2023-02-20 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

How to Choose the Best Home Loan?
2023-08-09 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

A Guide to Statutory Liquidity Ratio
2023-02-22 | 5 min
alt
home+loan Home Loan

[N][T][T][N][T]

The Importance of a Home Loan NOC
2023-01-31 | 7 min

PAM-ETB Web Content

Pre-Qualified Offer

Full Name*

Phone Number*

OTP*

Generate
Check Now

Call_And_Missed_Call

RHS-insurance-ad-card

RHS Ads