Home loan interest rates have changed after the RBI announced changes in repo rates. Therefore, if you are planning to avail of a home loan, make sure to calculate EMI based on new rates and not the old ones. Calculating EMI for new home loan interest rates is easy. All one needs is the help of a home loan EMI calculator. Read on to know more.
Home loan borrowers must ensure that they calculate equated monthly installments (EMIs) as it provides a precise idea of how much a person must pay in EMIs every month. Calculating EMI permits you to make more informed decisions about how much you have to pay each month, so a monthly expense can be chalked out.
It also aids in determining the home loan amount that you can secure, as well as the required contribution and property costs. As a result, understanding your EMI is critical to determining your home loan eligibility and enhancing planning for your home purchase.
What is an EMI?
An EMI denotes ‘Equated Monthly Instalment’, which is the home loan amount you’ll pay to your lender monthly until the home loan is repaid completely. It entails repaying the home loan principal as well as paying the home loan interest on the outstanding balance of your loan.
Here are the simple steps to calculate your home loan EMI.
The formula for EMI Calculation is as follows:
P x R x (1+R) ^N / [(1+R)^N-1] where:
P = Principal home loan amount
N = Home loan tenor in months
R = Monthly home loan interest rate
The rate of home loan interest (R) on your loan is calculated monthly.
R = The annual home loan interest rate/12/100
If the home loan interest rate is 7.2% per annum, then r = 7.2/12/100 = 0.006
Benefits of Using a Home Loan Interest Calculator
The easiest way to go about calculating your EMI is using a home loan interest calculator.
Here are the Benefits of Using a Home Loan Interest Calculator:
When a calculation is manually done, some miscalculations may occur without the user even realizing and it may end up in incorrect results. An online home loan interest calculator will never reflect incorrect results; all calculations are done with 100% accuracy.
Beneficial for Home Loan Management
While making home loan EMIs, sometimes a borrower may have extra funds to make home loan prepayments. If a customer wants to revisit financials to see how a prepayment might help pay off the home loan before a term ends, a home loan Interest calculator will help a customer accomplish that.
Easy to Use
Any borrower who wants to get the figure of the EMI just needs to enter the loan amount, loan tenor, rate of interest, and processing fee. The calculations are done by the home loan calculator and the home loan EMI amount is displayed by the calculator in just a matter of seconds.
When does my Home Loan EMIs Start?
EMIs start from the month after which the disbursement of the home loan takes place. For home loans for under-construction properties, EMIs usually begin after the home loan is disbursed, but borrowers can choose to get started with their EMIs as soon as they avail of their first disbursement, and their EMIs will proportionately increase with subsequent disbursement. For resale cases, as the whole home loan amount is disbursed in one go, EMIs on the whole home loan amount start from the month after disbursement.
How does the Housing Loan Repayment Work?
A home loan in India is repaid via Equated Monthly Installments (EMIs). The home loan EMI comprises the principal as well as interest components that are structured in such a manner that in the initial years of your housing loan, the interest component is larger than the principal, while toward the latter half of the home loan in India, the principal component is significantly larger.
What is the Maximum Home Loan that I can Obtain?
You will need to pay 10-25% of the total property cost as your own contribution based on the home loan amount. In India, you can avail of up to 75% to 90% of the property cost as a housing loan in India. In the case of construction, home improvement, and home extension loans, you can expect 75% to 90% of the construction /extension/improvement estimate.
What is the EMI for INR 25 Lakh Home Loan in India?
EMI on an INR 25 lakh home loan for 20 and 10 years are given below:
|EMI when housing loan tenor is 10 Years
|EMI when housing loan tenor is 20 Years
What is the EMI for 15 lakhs home loan?
EMI Calculations for a Home Loan of Rs. 15 Lakh with Different Tenors
|EMI when housing loan tenor is 10 Years
|EMI when Tenor is 20 Years
What is the EMI for INR 40 lakh home loan?
EMI calculations for a housing loan of INR 40 lakh with different loan tenors are mentioned in the following table:
|Rs 40 lakh housing loan EMI for 30 years
|Rs. 35, 103
|INR 40 lakh housing loan EMI for 20 years
|INR 38, 601
|INR 40 lakh housing loan EMI for 15 years
|INR 42, 984
|INR 40 lakh housing loan EMI for 10 years
|INR 52, 860
Here are some additional tips — besides using tools like a home loan EMI calculator and home loan interest calculator — that might help you:
Make sure your credit score is above 750 and clear outstanding dues before you avail of a home loan in India.
If you plan to prepay the home loan, opt for a floating rate.
Look for a housing loan, which is set on a reducing balance basis every month, instead of the annual schedule.
The longer the tenor of the housing loan, the higher will be the home loan interest payout.