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Abcs Of Home Loan Emi Calculators In India

By Author: Aishwarya Mahurkar
Total Articles: 291

EMI as we all know stands for Equated Monthly Instalment. EMI is the amount one undertakes to pay to the financial institution or the concerned company against the amount borrowed or the product bought. The amount payable comprises of the principal amount and the interest payable on the principal amount is in keeping with the tenure the amount has been borrowed for. The calculation of your EMI is simple; it is the sum of the principal amount and the interest divided by the tenure i.e. the number of months, in which the loan amount is to be paid back.

Understanding EMI calculation

EMI calculation results in a figure which is payable every month. The interest component of the EMI gradually decreases with time and the principle component of the EMI amount increases over time of the tenure in keeping with the exact percentage allocated towards payment of the principal amount. The component figures change, but the EMI amount remains the same for every month. Simply put, with time you would pay more towards to the principle amount and less for the interest. As the principal amount reduces so does the interest amount on the same. One may use the EMI formula to calculate the EMI amount by oneself, but it’s advisable to use the EMI calculator to do the same.

Using the EMI calculator for home loan EMI calculation

The EMI calculator which can be used for calculating your EMI for any loan type such as home loan EMI calculation or car loan EMI calculation. It can be used anytime, anywhere and any number of times. The EMI calculator shall display the results in a fraction of a second and you can rest assured its error free unlike when one does the calculation manually.

For home loan EMI calculation one is required to fill in the loan amount, the interest rate charged by the housing finance company and the number of months one wishes to pay back the loan in. The home loan calculation requires you to be precise and careful with the data you fill in as the principal amount are comparatively huge and the payment schedule should be met on time in order to avoid any negative marking on one’s credit score.

Types of EMI calculation

1. Variable or floating interest rate: Opting for the floating type of interest rate, one needs to consider the hike in interest rate with time as well as the possibility of it reducing over the period of time. The home loan EMI calculation would then display an amount that would reduce with the reduction in the interest rate and shall inflate with the inflation in the interest rate. You must then plan your finances accordingly.

2. Fixed interest rate: Having opted for fixed interest rate, the emi calculator of the home loan shall display the EMI amount one would be required to pay throughout the tenure, without expecting any changes in the same.

Understanding about the EMI calculator before using the calculator is important because it gives you clarity. Housing loan EMI calculator India not only makes calculation easy, but it helps you plan your finances accurately, ensuring your dream purchase remains special to you.

Author Bio :

The author is a seasoned writer on finance topics and through her writing; she articulates aspects of home loan that are important to people availing the home loan facility. She writes about a variety of topics covering the home loan documents, rates, EMI calculator that help to make the best decision.

Total Views: 81Word Count: 579See All articles From Author

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