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Role Of An Emi Calculator In The Home Loan Application Process
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An EMI calculator is a device which is provided by most banks free of charge for their customers. The calculator as the name suggests, helps loan applicants and borrowers accurately calculate their EMI for the month. The components which are required by the calculator to calculate an individual’s EMI for the month are: the principal loan amount, the tenure of the loan and the interest rate charge. Using these three components the calculator accurately calculates the EMI amount for the individual.
A home loan is a long term type of loan which can possibly put a lot of financial stress on the borrower. Banks make no exceptions and require their borrowers to pay their EMIs consistently each month without failure. If a borrower is unable to do so, then their defaults will lead to a bad credit score in the future. In cases when the borrower has been consistently defaulting on their loan, the bank will take ownership of the house or apartment purchased and sells it to retrieve the loan amount. This will turn out to be a huge financial disaster for the borrower.
It is for this very reason why a home loan EMI calculator plays such an important role in the home loan process. Many individuals in the beginning may wish to get a higher loan amount to purchase the house of their dreams. The problem occurs when the borrower applies for a large loan amount which he will not be able to afford in the future.
A home loan EMI calculator helps the applicants find out in advance how much he will be required to pay each month as EMI to the bank. This calculation will then allow the applicant plan in advance how they plan to repaying the loan each month. They may have to study their monthly expenses to see where to cut down on so that when the repayment process of the home loan begins, it will not greatly burden them financially.
Not only does a home loan EMI calculator help one plan their finances in advance and calculate the accurate EMI, it is also useful for those who have applied a floating interest rate. Applicants usually select a floating interest rate in hopes of getting more affordable EMI charges each month. The interest rate charged however tends to fluctuate making it difficult for the borrower to predict their EMI amount. In such a scenario, the individual can use the home loan EMI calculator to calculate an approximate of the EMI rate which will be charged.
The home loan EMI calculator is provided by banks free of charge. Home loan applicants must make good use of it to help them repay their loan amount on time with ease.
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 loans facility. She writes about a variety of topics covering the home loan documents, rates, home loan EMI calculator that help to make the best decision.
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