Home Loan EMI
The ownership of a house is a dream of almost every Indian. However, savings alone might not be sufficient to turn your dream to reality. For this reason, we need to bank upon financial institutions to take home loan. Financial support provided by banks on certain terms and conditions to buy or build your own residential property is termed as Home Loan.
While opting for Home Loan, the borrower must spend a quality of time and efforts for proper planning and evaluating all the futuristic outcomes, as they are borrowing a substantial amount that is to be repaid. Home Loan EMI mainly comprises of Principal Amount borrowed and the interest rate on this borrowed amount. EMI is then equated across each month of the total tenure.
Proper planning requires a good amount of time and exercise which is made easy with the use of ‘Banking on Tips’ Home Loan EMI Calculator. Home Loan EMI Calculator is a user friendly tool which can be used anytime (and free of cost) to calculate the monthly installments that need to be repaid for your borrowed sum. The calculator requires only a few inputs and provides the accurate results along with a self explanatory pie chart to analyze your total payments.
Home Loan EMI Calculator Explained
Borrower, at first, must analyze the actual cost to be incurred by the end of installment period. The actual cost is evaluated in terms of monthly installments (EMI) to be paid by the borrower for payment of loan. Basic inputs required while estimating EMI include amount to be borrowed (Principal), interest to be paid on amount (r), tenure of the loan and the processing fee for the said loan. After all this information is gathered, EMI must be evaluated. The basic formula that works behind calculating EMI is:
- E: the amount that you will have to pay every month i.e. the EMI.
- P: the amount that you want to borrow i.e. principle loan amount.
- r: the rate of interest that is applicable but calculated on a monthly basis instead of the annual rate of interest. It is obtained by using the formula r = annual interest/12/100; e.g. if rate of interest is 10% per annum then r = 10/12/100 = 0.00833.
- n: the duration of the loan in terms of months. So if you select a term of 20 years, n will be 240 (i.e. 20*12).
The entire task requires a number of permutations and combinations with the principal to be borrowed, and duration in which loan is to be repaid. To easy this process ‘Banking on Tips’ designed an EMI calculator for the evaluation of monthly EMI. The applicant needs to enter the amount they want to borrow, the duration of the loan, the interest rates and the processing fee and calculator will do the rest.
Using Home Loan EMI Calculator
Using ‘Banking on Tips’ Home Loan EMI calculator is quite easy and also a quick process. This calculator can be used to evaluate EMI for home loan.Inputs Required:
- Principal loan amount (in Rupees)
- Loan tenure (in months)
- Rate of interest (monthly in terms of percentage)
- Breakup of total payment (in terms of percentage) i.e. total principal and total payable interest in form of visual pie chart which is easy to understand.
- Total payable EMI (in Rupees) to be paid every month.
‘Banking on Tips’ EMI Calculator Benefits
- Available Free of Cost
- Available 24*7
- Easy to use
- Instant and Accurate Results (Loan EMI Amount)
- Helps in choosing the loan tenure
- Helps in better planning of your finances
- Time Saving
Factors influencing Home Loan EMI
The following factors affect the EMI
- The principal loan amount borrowed determines the total cost to be incurred as repayment of loan. The higher the loan amount, higher will be the EMI.
- The rate of interest levied by different banks is different. The higher the rate of interest, higher will be the EMI. Thus it is appropriate to research and choose the best among various schemes.
- Loan Tenure also plays an essential role in freeing the borrower from any financial burdens. Loan tenure must be chosen wisely. Home loan is a long term loan. In India, the largest tenure for home loans is 30 years.
- The lending authority imposes a certain percentage of loan amount as processing fees. Borrower must select a lender which has lesser processing fees.
Points to Contemplate
Before making any final deal for home loan, borrower must review the following:
- Check your eligibility with due care
- Research well and choose the best suitable among the available choices of lenders and schemes
- Know your EMI and tenure and thus have a proper financial planning
- Additional charges (inclusive of processing fees, legal verification charge, loan conversion charge, etc) which vary from one financial institution to other must be properly studied and must not be ignored
Do I need to Sign-up for accessing Home Loan EMI Calculator?
No. The home loan EMI calculator is absolutely free of cost to guide our readers. There are no hidden terms and conditions to use this calculator and can be freely used any number of times.
What is the Eligibility for Home Loan?
- Age- The borrower must have attained a minimum of 21 years of age while opting for Home Loan. Also the loan must be repaid by the age borrower reaches 60 or 65 years (varies as per bank guidelines)
- Income-Every lending authority prescribes a minimum monthly/ annual income for availing home loan which varies in case of salaried employees, working professionals and self-employed.
- Employed Experience- A minimum years of experience is essential by any borrower to avail home loan.
- Place of Residence- The borrower must have a stay of minimum one year at his current place of residence.
- Credit Score- This score defines the worthiness of the borrower towards payment of any past loans.
What are the essential documents for Home Loan?
- Home Loan application duly filled and signed
- Passport size photographs
- Identity Proof, Age Proof and Address Proof
- Last Six Months Bank Statements
- Processing Fees Cheque
- Last 3 months salary slips (for salaried applicants)
- Form 16 or Income Tax Returns (for salaried applicants)
- Last 3 years income tax returns with computation of Income (self employed applicants)
- Last 3 years CA Certified/Audited balance sheets and Profit and Loss Account (self employed applicants)
Note: This list includes the basic documents required for availing Home Loan. Certain addition in these are possible for different lending authorities.
Can I avail a home loan if I am planning to renovate my existing property?
Home Loan is a secured loan which is available for following purposes:
- Buying any new property house, flat, land etc
- Extension of any existing property
- Renovating any previously owned property
- Construction of a house or plot already owned