What is a Home Loan EMI Calculator, and How Does it Work?
Overview
Whenever a person takes a home loan, he/she needs to repay that amount to the bank or any other financial institution. Moreover, to repay that loan, the person pays monthly EMI for certain tenure. This EMI includes a fraction of the principal amount and the interest payable.
What is a home loan EMI calculator?
EMI calculator is a tool used worldwide for financial planning. It helps in making simple calculations of the monthly payment amount in the form of the EMI. If a person is looking to avail a loan, then they are most likely to calculate their monthly EMI. It helps to perform an analysis of their repaying capacity and whether they are capable of paying this much amount or not.
To use this housing loan EMI calculator, the user just needs to enter a few details such as the amount, tenure, and the rate of interest. Based on these details, the users can check how much EMI they need to pay against the loan they want to avail.
How does the home loan EMI calculator work?
The home Loan EMI calculator works on a defined formula to calculate the EMI amount. Let’s check:
Home loan EMI calculation formula: EMI = [P x R x (1+R) ^N]/ [(1+R) ^N-1]
P stands for Principal Loan Amount
R stands for Rate of Interest
N stands for Total Home Loan Tenure in months
What are the benefits of using a home loan EMI calculator?
There are so many advantages of using a home loan EMI calculator, such as:
· It helps to save a lot of time as well as effort, as you can get fast results from the complex calculations
· It is very easy and convenient to use. You don’t need any technical knowledge in using the home loan EMI calculator
· The results obtained are very accurate
· It can also be used to calculate other EMIs
· Helps in effective monetary planning
Conclusion
A home loan is one of the best ways to accomplish your dream of buying your own house. All you need to consider is the EMI to be paid. Before availing a home loan, you can check the interest rates of the various lenders and calculate the monthly EMIs by using the home loan EMI calculator.
