Applying for a home loan? Know your EMI using a home loan EMI calculator
The home loan interest rates are at their affordable best with the Reserve Bank of India’s decision to keep policy rates unchanged. This has increased the demand for this credit instrument. As documented in a recent report, the request for a housing credit has increased by 26% in the first half of 2021.
Since housing credits are a significant financial commitment, it is ideal to have a clear idea about their repayment before applying. In this regard, one should take the help of a housing loan EMI calculator for an informed decision.
How to use a home loan EMI calculator?
Here is a step-by-step guide on how to calculate EMI using this online device –
Step 1: Visit the official website of a lender and open an EMI calculator
Step 2: Enter the relevant details such as principal amount, housing loan interest rate, and loan tenor
Step 3: Get the EMI amount and total interest payable instantly
Additionally, one can use the slider option or enter different values to find a suitable loan offer. Using these calculators is not a hassle, and they offer a host of advantages over manual calculation and help make informed decisions.
Top 5 benefits of using a housing loan calculator
Here are some notable advantages of using an online calculator –
- Quick and Accurate results
Using the ‘EMI = [P x R x (1+R) ^N] / [(1+R) ^N-1]’ formula one can easily find monthly instalments of a home loan. However, manual calculations always run the risk of errors, leading to a wrong decision. Therefore, these online devices ensure accuracy, which further helps to apply for credit.
Additionally, manual calculations are lengthy and time-consuming. Whereas these devices present the required information instantly, saving valuable time.
- Easy to use
EMI calculators typically come with a user-friendly interface that further enhances the ease of use. These devices are not hard to use, and the application is straightforward. To get the result they want, one just needs to enter home loan rates, principal, and tenor in their respective fields.
- Customisation facility
One of the most notable advantages of using a housing loan interest calculator is the customisation facility. With this device, borrowers can enter various values as many times as they want to find a suitable loan repayment schedule. Moreover, they can compare multiple loan offers using it. Thus, helping them find a loan offer that suits their requirements and repayment.
- Better financial planning with amortisation schedule
Along with all its perks mentioned above, an online calculator also provides access to the loan amortisation schedule. This chart or table includes a detailed breakup of a housing loan’s EMI payment. It shows how the instalments progress through the tenor and how interest and principal components change.
Access to this schedule can help potential borrowers with their loan repayment. They can now plan their payments accordingly and avoid any complications.
- Requires no charges
Lastbut not least, online calculators like these do not entail any additional charges from usage. They are available free of cost on the lender’s website, and one can use them as many times as he/she wants.
Besides offering access to a housing loan EMI calculator, reputed lenders also extend pre-approved offers to their existing customers. These offers reduce the time required for a home loan application by streamlining the process. Intending borrowers can check their pre-approved offers by submitting their essential contact details.
Besides knowing how to use a home loan calculator and its advantages, prospective borrowers should also understand other aspects of this financial product.
Eligibility criteria of housing credits
Eligibility parameters of a home loan include –
- Credit score: 750 or more
- Age: 23 to 68 years for salaried applicants
25 to 70 years for self-employed applicants
- Employment type: Salaried and self-employed
- Work experience: At least 3 years for salaried individuals, and minimum 5 years of business vintage for self-employed individuals
- Monthly income: Depends on an applicant’s city of residence and employment type
Apart from these, a financier may have additional eligibility requirements that one needs to meet to the source credit for house purchase.
Documents required to apply for a home loan
Here is a list of documents that one needs to submit for a housing loan –
- KYC papers
- Income proof (form 16, salary slip, ITR documents, profit and loss statement, and likes)
- Documents proving business vintage
- Required property papers
Besides knowing these essentials of housing credit, intending borrowers should also learn about the application process of this credit instrument. Nowadays, with online services, one can now easily apply for a credit via the website or mobile application of a lender.
However, leading financiers extend pre-approved offers that streamline this process and save time. These offers are available on a host of financial products, including home loans, loans against property, etc. Borrowers can enter their personal contact information to learn more about this.
A housing loan EMI calculator helps prospective borrowers make sound financial decisions. They get access to a lot more information apart from just EMIs, which helps in this regard.