Today, you can easily apply for all types of home loans, be it for the move-in property, under-construction one, or a plot. You can begin the loan application process online and calculate the exact equated monthly instalment amount payable against different interest rates and tenure before approaching the lender. Moreover, you can reconsider the principal amount needed and plan the monthly budget after deducting the loan EMI.
This is possible only with one tool, and that is the home loan calculator. You can compute your EMI accurately using the instrument. Here are the steps for using it.
Enter the principal amount
The home loan EMI calculator is simple with three primary tabs, of which the first one is the principal amount. You should enter the loan amount needed after factoring in the down payment, which is 15% or higher. Most lenders offer finance for up to 80% on the actual property value, but you can opt for lesser finance if you can afford a higher down payment. While calculating the principal amount, you should be mindful of the different charges associated with the loan.
These include the processing fees, stamp duty costs, legal expenses, evaluation fees, etc. and then have them as a part of the principal amount if needed.
Add the interest rates
Generally, all lenders offer similar home loan interest rates. This is because the minimum and maximum rates get decided by the Reserve Bank of India. Also, lenders cannot levy interest rates lower than the Marginal Cost of Funds based on Lending Rate. You can do a comparative study for understanding the highest and lowest interest rates offered by varied lenders. Shortlist a few of them who provide the competitive ones and enter the value in the interest tab of the EMI calculator for home loan.
Input the loan tenure
The third tab in the housing loan EMI calculator is the loan tenure, where you add the preferred term. Remember, lenders offer varied tenure. While most of them provide a maximum of 25 years, a few also go up to 30 years. If you need a 15-year loan duration, you should add figure 180 in the tab. That said, refrain from utilising the maximum tenure offered since high term can increase the payable amount against the loan.
Once added all the mentioned values, click enter. Within a fraction of seconds, the house loan EMI calculator computes accurately the EMI payable.
If the computed EMI amount is within your budget, click reset and repeat the mentioned steps. You can keep doing this until you arrive at the amount which fits your budget.