Despite the income shrinkages and economic challenges witnessed in 2020, the demand for affordable housing properties remained robust. Looking at the present market situation, it is fair to say that India’s home loan market is likely to grow at a CAGR of around 22% by 2026. However, on the other hand, financial institutions had to face loan defaults due to this economic downturn.
According to repayment bounce data excerpted from NACH, 41% of auto-debit transactions failed towards the end of 2020, mainly because of inadequate funds. Looking at this data, it is fair to say that ignorance regarding loan EMIs and their repayment schedule played a crucial role in this huge loss. In order to avoid that, it is wise to regulate your expenses and know exact estimates using a housing loan EMI calculator.
Key components of an EMI Calculator
EMI calculator is considered an essential financial tool that helps you get a clear idea about your monthly liabilities for the entire loan tenor. While calculating your EMIs, you need to enter a few specific inputs that influence your monthly repayments. In order to smoothly manage your finance, it is essential to know how the following key factors impact your home loan EMI.
- Loan tenor: Financial institutions usually allocate certain eligibility parameters, and among them, age remains a key aspect while determining the loan tenor. However, it mainly depends on borrowers if they want to opt for a longer tenor to make their EMIs affordable or shorter ones to rid of their financial liabilities quicker. Borrowers can consider using a home loan eligibility calculator to check which repayment plan suits their financial planning the most.
- Principal amount: This is the loan amount you are planning to borrow from your preferred lender. Regardless of the severity of your crises, lenders always prioritise necessary aspects like credit history, repayment track record, etc., before sanctioning the principal amount. Before checking the EMI with a housing loan EMI calculator, you should be sure about the amount you want to borrow and if that matches your repayment capacity.
- Interest rates: This specific component gets primarily decided by one’s preferred lending institution. Therefore, it is advisable to go through the guide to getting a better home loan interest rate and compare different lenders to find the affordable one.
Apart from these primary components, home loan processing fee and prepayments on your property loan have equal contribution towards reducing your monthly instalments. Even though earlier the manual calculation process was relatively tedious, the easy access to online house EMI calculator has made things more convenient for the borrowers.
Steps to calculate home loan EMI with an online calculator
Borrowers can simply follow the below-mentioned steps to know the exact estimates before availing a home loan:
Step 1: Visit the online portal of your preferred financial institution and choose the house loan EMI calculator India option, or you can use the app version as well.
Step 2: Enter the required details such as loan amount, tenor and the offered interest rate.
Step 3: Recheck all the details and wait for a few seconds to find out the exact amount you need to bear for the entire loan tenor.
The easy procedure not only comes in handy while applying for the loan but also while refinancing it at favourable terms. With HFCs introducing pre-approved offers on financial products like home loans, loan against property, etc., financing has become truly hassle-free. Therefore, consider checking your pre-approved offer by submitting your full name and phone number.
The access to multiple online applications and easy connectivity has made it easier for borrowers to check their monthly liabilities and calculate home loan eligibility in just a few clicks. Therefore, before applying for a high-value loan, it is better to use a housing loan EMI calculator to stay prepared for your financial commitment.