Considering the policy rates of the RBI, home loans have become affordable for quite some time now. As a result of a low repo and reverse repo rate, lenders in India are now offering housing credit at sub-7% rates, which has driven the demand for this credit product significantly.
However, individuals need to understand how much interest they will have to pay after deciding their loan amount and tenor. For this, they can leverage a home loan interest calculator. It will help them approximate their cost of borrowing, total interest, EMI amount, repayment schedule etc. So, individuals must know the ways to utilise this calculator.
Procedures to use a home loan interest calculator
The home loan interest calculator is available on almost all websites of different lending institutions in India. So, first of all, individuals need to access any lender’s website and search for this calculator. After that, they should follow the steps as mentioned below to avail all its benefits:
Step 1: After accessing the web-based calculator, enter the inputs like home loan amount and a suitable tenor and the interest rate.
Note: There are also online housing loan interest calculators in which individuals need to adjust the slider to enter these inputs.
Step 2: Click on the option titled “Calculate”.
After completing these steps, intending borrowers can view their desired results. Thus, this is an easy way to estimate total interest, monthly payables, schedule of repayment etc. All these results can be significantly beneficial for willing borrowers. They can assume their probable financial obligations before taking a loan.
However, individuals also should be aware of the factors that can impact their home loan interest rate. These may affect their applicable interest rate. Additionally, individuals should also understand why using these online calculators can be of great benefit.
Benefits of using the home loan EMI calculator
Following are the advantages individuals may get while taking a home loan:
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Knowing the befitting loan tenor
Individuals must understand a tenor suitable for their repayment. Generally, this duration of repayment is inversely related to the EMI amount. In other words, individuals need to pay a higher EMI amount in a shorter loan tenor. So, they need to check which repayment duration will make their EMIs comfortable. Individuals can conveniently do this by changing the inputs in the loan tenor.
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Reducing the calculation errors
Borrowers can calculate their EMIs with pen and paper using its mathematical formula. However, there is a chance of error as the calculation involves complicated formulas and several fractions. So, to avoid any mistakes, they need to utilise these easy-to-use calculators.
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Getting faster result
Individuals will take longer to manually compute the EMIs against a loan amount and its tenor. However, these web-based calculators give computerised results within a second. They just need to enter the inputs in respective fields like loan tenor, amount, and interest rate.
Therefore, it is important to utilise a housing loan calculator before indulging in the credit advance. It will help them make informed decisions before entering these long term financial obligations. Apart from this, there are some important questions that they need to ask their home loan lender to make their borrowing more secure.
Furthermore, borrowers can leverage pre-approved offers extended by lenders on financial products like home loans and loans against property and others. Individuals can expedite their loan application process by checking this benefit. They only need to enter their names and contact information to check their pre-approved offers.
In conclusion, a home loan makes individuals involved financially for the long term. Therefore, they must check whether the EMI amount is within their reach or the tenor is agreeable before accepting the home loan. They can quickly assess all these factors using a home loan interest calculator.