Why Should You Use an EMI Calculator?
Are you planning to buy a new home and apply for a housing loan to get the funds for the purchase? If so, then it would be a good idea to know the EMI you must pay every month to the lender before you sign the loan documents. And, to compute EMI, you can use online tools such as a home loan EMI calculator.
What is a home loan EMI calculator?
As mentioned earlier, the loan EMI calculator is an online tool that allows you to calculate the monthly EMIs for your home. And, to do the calculation, you must have basic loan-related details such as the interest rate charged by the lender, the amount you want to borrow (home loan principal amount), the home loan tenure, etc. The tool can also help you get a break-up of the different charges associated with your home loan.
The formula for calculating home loan EMI
Most online home loan EMI calculators use the following formula for EMI calculation:
EMI = [P x R x (1+R) ^N]/[(1+R) ^N-1]
In the above formula,
P stands for the principal amount you borrow
R stands for the interest rate
N stands for the home loan tenure
Benefits of using the home loan EMI calculator
· Easy to use
One of the most significant features of a home loan EMI calculator is that it is easy to use. You need not have any technical knowledge or any prior experience to use. All you must do is enter the details in the relevant section/boxes and press enters to get the results.
Additionally, the tool is free to use, you can use the tool anytime from anywhere you want. You just need an internet connection and a computer or a smartphone. You can change the inputs multiple times and try different combinations to know how much you can borrow so that the EMI is affordable and fits your budget.
· Accurate results
Many people tend to do the EMI calculations manually. However, it is better to avoid such mistakes and avoid the risk of miscalculation and jeopardizing your financial planning. So, whether you apply for a home loan, it is better to use the loan EMI calculator to get accurate results.
· Helps plan your finances well to manage repayments
By using the home loan EMI calculator, you can protect yourself from future financial troubles. Knowing the exact EMI you must pay in advance, can help you plan your finances accordingly and include the EMI payments in your monthly budget more efficiently.
· Beneficial for comparing loan offers
You can use the home loan EMI calculator to compare the loan offers from different banks more efficiently. The results show the total borrowing cost and each EMI based on the interest rate and other charges. Thus, you can narrow down the best option to suit your specific needs.
· Safe to use
Many people have a misconception that using the online calculator is unsafe. However, the truth is that these online tools are entirely safe and you need not worry about security issues. To compute the EMIs, you need not enter any personal details that may reveal your identity online.
Today, all lenders have home loan EMI calculators on their websites. So, use it to your advantage and make an informed borrowing decision.