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Simple Steps To Calculate Your Emi At Your Convenience

By Author: Aishwarya Mahurkar
Total Articles: 291

EMI is the amount a borrower is required to pay to the bank or financial institution every month until the tenure of the loan ends. When a prospective borrower wishes to apply for a home loan, the first thing they evaluate is the EMI requirements and whether or not it is affordable. The components that affect the EMI of a borrower are the loan amount, the tenure of the loan, the interest charged, and processing fee. In cases where the borrower has already paid a certain amount of the loan to the bank, the EMIs are calculated after reducing the paid amount.

Most banks provide borrowers with online EMI calculators for home loans. This helps the borrower have a clear understanding of the amount he is required to repay the bank each month. These EMI calculators are easy to use and provide the borrowers with a detailed and easy to understand explanation of the payment requirements. However, when a borrower applies for a floating interest rate, EMI calculators for home loans are more complicated. Since the interest rate keeps fluctuating, a borrower is advised to take into consideration two scenarios. One in which the borrower takes an optimistic approach and calculates the EMI with an expected low interest rate, and another pessimistic approach wherein the EMI is calculated with an expected higher rate of interest. This is extremely important as it allows the borrower to remain prepared for the best and worst case scenario.

When you apply for a home loan you need to try different combinations to find one that fits your needs perfectly. The reason is that in the early years you tend to pay more interest than the principal amount itself. So, if you take a loan with a longer tenure with a plan to repay the principal amount in a few years, you will end up spending more than the actual amount of the loan issued. Also, the financial institution may charge you pre-payment penalty as well. Hence, it is crucial for a borrower to carefully analyse the situation and choose the tenure, loan amount and interest based on their financial abilities to repay the loan.

The EMI calculator for home loans is an ideal tool that a prospective borrower can use to find out the ideal combination to fit their budgetary requirements. All you have to do is set the principal loan amount, rate of interest and the tenure opted for. The EMI calculator will automatically provide you with the details and amount of each month’s EMIin a matter of seconds.

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 calculators for home loan that help to make the best decision.

Total Views: 130Word Count: 483See All articles From Author

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