Owing to factors like attractive deals, discounts and cheaper home loan rates, nearly 62% of the population considers 2021 the right time to invest in the real estate market. With companies around the world shifting to ‘work from home’, individuals are more inclined to buy homes than before. One of the driving factors in this rising demand are offers and discounts extended by developers, coupled with lower home loan interest rates.
When it comes to purchasing a home, it is pertinent for individuals to know about their EMIs before applying for a home loan by using a home loan EMI calculator online. Evaluation of EMI is a convenient way to reduce a borrower’s financial strain. Calculating EMIs with a home loan calculator determines the affordability of a loan.
A few benefits of using a home loan EMI or home loan interest calculator are mentioned below.
Benefits of using an EMI calculator
- A monthly budget is a crucial factor to consider before an individual settles for a particular borrowing amount. Using a house loan calculator can help one arrive at an amount that fits his/her budget. Borrowers can alter the tenor and principal amount in the calculator till they find an affordable EMI amount.
- After settling on the appropriate borrowing amount based on respective interest rates, one can alter the tenor to select a convenient EMI. This will help an individual to plan the repayment better. Timely payment of home loan EMIs is also possible as a borrower can estimate the amount to be spent beforehand and eliminate the risk of default.
- Using a home loan EMI calculator online will help a loan borrower evaluate EMI amounts before the application process so that he can plan his repayments better.
Therefore, it is apparent that calculating EMIs before taking a home loan can be extremely beneficial in the borrowing process.
Furthermore, using a housing loan EMI calculator is simple and hassle-free and does not require lengthy calculations.
How to use the EMI calculator?
- After visiting the calculator page online on any lender’s website, one should enter the loan amount he/she wishes to borrow.
- The next step would be to select the respective tenor.
- Selecting interest rates comes next after entering tenor.
- On entering these three parameters, one can click on ‘Calculate’ to check the total interest payable, total payable amount and the EMI, respectively, at the bottom of the screen.
Few techniques to reduce home loan EMI
- Longer tenor
A longer tenor means one will end up paying more interest, however, it translates to reduced EMIs. Using a home loan EMI calculator online will help a borrower to choose an appropriate tenor while applying for a loan.
- Regular prepayments
Home loan EMIs consist of two parts, interests charged on the borrowed sum and principal amount. The interest component of the EMI remains higher during the initial years of repayment. Making prepayments during this period can help reduce the total interest outgo and consequently reduce the EMI amount each month.
- Home loan balance transfer
One can opt for a home loan balance transfer if the existing lender is offering a higher interest rate.
The above points sum up the effective ways in which one can reduce the home loan interest. With such factors into consideration, the process to borrow home loans can be optimised to quite an extent.
Additionally, reputed financial institutions provide pre-approved offers to simplify the loan application process. These offers are applicable on financial products like home loans, loans against property, etc. You can check your pre-approved offer by providing your name and contact number.
With such effective factors into play, individuals can access the loans easily and ensure that they can repay the borrowed amount without hassle.