Sunday, August 1, 2021

# Check for Equated Monthly Instalment for a Home Loan

According to recent reports, the delinquency rate for home loans spiked up by 13 basis points (bps) on a year-on-year (y-o-y) basis in the September quarter of the year 2020. Such a high delinquency rate indicates mismanagement of debt, creating a gap between availing an advance and repaying it successfully.

Defaulting on home loan EMI payment has several adverse effects on an individual and must be avoided at all costs. A housing loan EMI calculator is a user-friendly tool that can help gauge the EMI amounts before applying for a loan, thereby facilitating better financial planning and lowering the chances of defaults.

## What is a home loan EMI calculator?

A house EMI calculator is an easy-to-use tool that allows a potential borrower to calculate home loan EMIs easily in an instant. This, in turn, helps the borrower to make an informed decision regarding the home loan amount to be availed.

Equated Monthly Instalments can be calculated manually using the following formula:

EMI= [P x R x (1+R) ^N]/ [(1+R) ^N-1]

Here, P is the principal amount, or the loan amount borrowed,

R denotes the home loan interest rate applicable on a monthly basis,

N represents the number of monthly instalments.

Calculating EMIs using this formula, however, might prove to be a tedious task. This is exactly where a housing loan EMI calculator comes in handy, as it processes the entire calculation in a few simple steps.

## How to check EMIs on a home loan EMI calculator?

The steps to use a house loan EMI calculator in India are as follows –

Step 1: Enter the home loan amount to be borrowed.

Step 2: Fill in the rate of interest applicable.

Step 3: Provide the loan tenor over which the loan would be repaid.

After entering the above data, the calculator would display the home loan EMI to be paid. A housing loan EMI calculator also acts as an interest calculator as it also lets the user know the interest amount that is due on a home loan along with the payable home loan EMI.

## What are the benefits of using a home loan EMI calculator?

The several benefits of using a housing loan EMI calculator are as follows –

• Accurately and instantly displays the payable EMIs.
• It is an online tool that can be accessed from anywhere.
• Allows a borrower to select the ideal loan tenor.
• Helps a borrower to make an informed decision on the loan amount.
• Offers assistance regarding repayment planning.
• Loan comparison becomes easier.

As there are many benefits of calculating EMIs before availing a home loan, this tool can be advantageous for any potential borrower.

Like a housing loan EMI calculator, a borrower can also use a home loan eligibility calculator to check for the amount that can be acquired based on their eligibility.

Determining the home loan EMIs payable beforehand would help an individual carry out the repayments responsibly, which would, in turn, prove to be a gateway to earn several benefits in the future.

For instance, financial institutions provide pre-approved offers to eligible candidates, which can help in simplifying and accelerating the lending process. These offers are provided on various financial products like home loans, loans against property, and more. Borrowers can check their pre-approved offer by providing a few details such as name and contact number.

Thus, it can be concluded that a housing loan EMI calculator is an indispensable tool offering several benefits, in addition to allowing a borrower to check for home loan EMIs.

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