Home Loan Calculator - Importance, Benefits and How to Use?

Home Loan Calculator

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A home loan is a significant financial commitment that typically lasts decades; therefore, borrowers should conduct thorough financial planning before taking on an obligation of this magnitude. Using a Home Loan Calculator is one of the simplest ways to plan your home loan journey. The calculator is a useful online tool that is available for free on the websites of most lenders. It can be used to forecast a rough EMI plan that corresponds to the loan amount desired. This will not only give you a good idea of how feasible your home loan request is, but it will also reduce the possibility of human error.

Borrowers can also use the EMI Calculator to experiment with different loan amounts and tenor combinations to find the best EMI for them. In simple words, a Home Loan Calculator allows a person to create a repayment schedule and plan their loan journey accordingly.

What is Home Loan Calculator?

A home loan calculator is an online calculator that is used to compute home loan EMIs. HomeFirst calculator calculates the EMI as well as the payment breakdown component, which includes the principal and interest amount. This is an online calculator that can be used to calculate the monthly EMIs for a specific loan amount. This EMI calculator considers the loan amount, the interest rate charged by the bank, and the repayment period, and calculates the amount of EMI the borrower must pay each month during the specified period.

How Do You Calculate the EMI Payable on a Home Loan?

Home loans are repaid through EMIs, which include both a principal and an interest component.

The lender will also provide you with an amortization schedule that details how much of each monthly EMI goes toward principal repayment and how much goes toward interest repayment. The amortization schedule will also provide you with your monthly corresponding balance.

How Does Home Loan EMI Helps in Purchasing a Home?

The home loan EMI is an important factor to consider when choosing a home loan. As a result, calculating EMIs ahead of time with an online calculator assists you in planning for the home loan. mortgage loan calculation EMI is beneficial –

  • Determine the amount to borrow based on your monthly budget.
  • Plan home loan repayment to ensure EMI payments are made on time.
  • Make a prepayment plan.

How to Use a Home Loan EMI Calculator?

Just because we know the formula for calculating EMIs does not mean we should sit down with a pen and paper and do it ourselves. Because the EMI calculation formula is difficult to understand, manual calculations are prone to errors. Furthermore, manually creating your amortization schedule will take longer. As a result, to understand their monthly EMI obligation and amortization schedule, one must use online financial tools such as a EMI calculator.

Here are some of the advantages of using a home loan calculator.

  • Home loan EMI calculators can be relied on to be accurate every time. They always produce accurate results.
  • Your calculator is accurate and fast; after entering all of the information, you will receive your monthly EMI and amortization schedule in seconds.
  • Since this online calculator produces results in seconds, you can experiment with as many loan amount, interest rate, and tenor combinations as you want. Trying out different combinations will help you find the best combination for you.
  • You can use the online calculator to compare different offers from different lenders and select the one that best fits your budget and needs.
  • Home loan EMI calculators are simple to use and completely free.

Why is it Important to Use a Home Loan EMI Calculator?

It can be difficult to calculate the exact EMI for your home loan. The most a layperson can usually do is consult an accountant to run the numbers.

But what if someone created an online tool that can perform complex calculations in seconds and provide accurate results? Here’s where an EMI calculator comes in handy.

  • Obtaining such an estimate prior to applying for a home loan will allow you to better plan your finances and reduce the risk of payment default.
  • The best part is that the majority of online EMI calculators are completely free to use. You can even use a home loan EMI calculator to determine the appropriate loan size for yourself.
  • You shouldn’t bite off more than you can chew, as the saying goes. This implies that you should not borrow the full amount available to you.
  • Instead, use an EMI calculator to determine the maximum EMI amount you can afford before deciding on the size of your borrowing.

Benefits of Home Loan EMI Calculator

The following are some of the advantages of using a EMI calculator:

  • It assists you in budgeting your expenses based on your income.
  • Indicate the total interest you will pay at the end of your loan term.
  • The calculator assists you in determining whether to increase or decrease the tenure based on your budget.
  • It is a quick and simple tool for you to use.
  • It is dynamic; figures can be easily changed.
  • The first step is to determine your eligibility for a home loan, not to calculate your EMI. The home loan eligibility calculator makes it simple to determine your eligibility.

Calculate Home Loan Eligibility

Who Can Use the Home Loan EMI Calculator?

Anyone planning to buy a home can use an EMI calculator to determine the size of their EMI.

In general, it is recommended that you calculate your EMI at a higher interest rate in order to build a buffer for any future interest rate increases.

Decoding the Home Loan EMI Calculator Formula

To calculate your EMI,  use the following formula: e = [p x r x (1+r) n] / [(1+r) n-1]

Here, e represents the EMI amount, p represents the principal, r represents the interest rate, and n represents the loan term.

So, if you apply for a home loan of INR 50 lacs for a term of 20 years at a 10% interest rate, your EMI would be: e = [50, 00,000 x 10 x (1+10) 20] / [(1+10) 20-1]

In this case, EMI (e) equals INR 48,251 per month.

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Also read:

Missed Home Loan EMI Payment?

How To Reduce Home Loan EMI?

Benefits of Home Loan EMI Calculator

Home Loan EMI Calculator: How to Reduce Your Home Loan EMI Burden

Home Loan EMI Calculator: Know Your Home Loan EMI

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Your home loan will be processed in 2 steps:

  1. You receive the approval of your home loan.
  2. You sign the loan agreement papers and complete other necessary documentation. The loan amount is thereafter paid directly to the builder by Home First Finance Company.

Loan decisions are made in less than a week. You will receive an SMS on your registered mobile number as soon as we make a decision.

HomeFirst does not charge any prepayment fees. This applies to both partial and full repayments. In fact, we have a special Auto-Prepay feature to facilitate this process for you.

HomeFirst offers loan tenures between 1 year to 25 years. If you opt for a longer tenure, you can get the advantage of a lower EMI each month.

HomeFirst can provide finance up to 90% of the property value. The balance has to be arranged by you from other sources. Please note: 90% financing is only available for loans amounting to less than Rs. 30 lakhs.

All co-owners of the property have to be co-applicants to the loan. A person who is not a co-owner can also become a co-applicant to the loan.

During the construction phase, HomeFirst will disburse funds to the builder on your behalf. These will be based on payment requests made by the builder as per the construction schedule.

HomeFirst will charge interest only on the amount disbursed as loan during the construction phase. In this period, interest is charged only on the disbursed loan amount. For example, if you have a sanctioned loan of Rs 10 lakhs, but the property is under construction and we have disbursed only Rs 4 lakhs, you will be charged interest only on 4 lakhs. These interest payments are referred to as pre-EMI interest payments.

EMI payments will start only after completion of the project and registration of the property.

All cheques to HomeFirst should be written out in favor of ‘Home First Finance Company India Limited’.

In the event of an unfortunate incident, home loan insurance will help you or your family pay off the home loan. This ensures that the burden does not suddenly fall upon family members at a bad time.

Send us your resume on careers@homefirstindia.com with the position you are applying for in the subject line.