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If you are planning to avail a home loan, you might have heard about the housing loan EMI calculator. It tells you about your repayment amount and helps you do financial planning better. However, here are ten facts that you might not know about an EMI calculator. Read on.
Facts about online home loan EMI calculators that you must know
- An EMI calculator is a self-help computation tool
An EMI calculator is an online computation tool that you must use before applying for a home loan. With an EMI calculator, you can find the best loan amount and tenure based on a few variable values. This calculator works on the following mathematical formula.
E = P * r * (1+r)^n / ((1+r)^n-1)
Where,
E is the equated monthly instalment amount
P is the principal loan amount or the loan you want to take
r is the expected rate of interest calculated monthly
- It can be used by anyone
The home loan EMI calculator is free to use and is available online. You do not need to enter your credential or log in to access the calculator. It is available on all lenders’ websites and some aggregators’ websites.
- It gives accurate results
Unlike manual calculations which have room for errors, you get accurate results from an EMI calculator. You can make no mistakes in getting the desired results while using a home loan calculator.
- You need not enter personal details
To use an EMI calculator, you need not add any personal details like name or contact number.
- You only need three values
You only need to input your loan amount, interest rate and tenure to get the desired results through an EMI calculator.
- It tells you about the amortisation schedule
The home loan calculator also provides the amortisation schedule which contains a separate amount charged for principal and interest each month in your EMI.
- It can help you plan your budget
Once you know the total loan amount and your EMI, you can prepare your budget accordingly and plan your finances.
- It takes into account only fixed rate
The results on the EMI calculator are based on a fixed interest rate. These can be different based on prevailing market rates and changes in base rates if you opt for a floating interest rate
- You can experiment with an EMI calculator
While using an EMI calculator, you can input different values and experiment for different results. You can modify the tenure of the loan amount to get a suitable EMI.
- The results are indicative
The results of the home loan EMI calculator are tentative and indicative. Your EMI and total borrowing amount can change after the lender reviews your application and eligibility. However, you can get a fair idea of your EMI and loan amount with the usage of the calculator.
Whenever you avail a housing loan, you must use an EMI calculator. It is an insightful tool that helps you borrow the right home loan amount as per your affordability and budget. You can then compare different home loan offers and choose the best one.
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