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Importance Of Emi Calculators In Loan Repayment
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If a person wants to purchase a land or renovate an existing home but do not have enough funds to do so, he can apply for financial aid from banks known as home loan. Home loans may have varying tenures the maximum of which can stretch up to 30 years. The amount of EMI you pay is inversely proportional to the duration of the term of the home loan. But in this regard it is important to consider the fact that stretching the tenure may result in the amount of interest paid to increase significantly. So, before applying for a home loan it is a vital requirement to compare the interest rates, tenure and the EMI amount offered by different banks. For this purpose, a housing loan EMI calculator proves to be a very useful tool.
When you borrow a certain amount of money from a bank there are various modes of repayment. The most common among them is the EMI method. This mode of repayment enables you to pay back the borrowed sum along with the interest involved on a monthly basis. So, it is very important to have an idea of the amount you can pay as EMI without hindering your monthly expenditure budget. The housing loan EMI calculator can be used to calculate this. The EMI amount is a combination of the principal amount and the interest generated. In this case, it is wise to keep in mind that the EMI amount shouldn’t exceed 40% of your monthly income.
The EMI calculator saves you from all the complex calculations and provides the exact EMI required. The first thing you need to do is enter the home loan amount needed by you. Next, you need to feed the tenure and rate of interest offered by the bank in the housing loan EMI calculator. Then press the calculate button. The result displayed by the calculator is your EMI amount. If you find that the EMI amount does not suit your requirements, go for recalculation using the varying interest rates, which different banks are ready to offer. If you want a lesser EMI amount you can also opt for a lesser loan amount or a longer tenure.
Importance of EMI calculator
The EMI calculator plays a very important role in the process of applying for a home loan . Its importance can be elaborated through the following points:
• It gives an estimate of how much money you have to spend towards your home loan each month
• You can avail the best offer in the market by comparing different products
• It helps you to choose the repayment options wisely
• It lets you know about the affordability of the loan. This is turn prevents you from bad credit
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, housing loan EMI calculator that help to make the best decision.
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