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How To Calculate Your Home Loan Emis?
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EMI also, known as Equated Monthly Income is the amount an individual has to pay each month to the financial institution to repay the loan. The factors which affect the EMI charge of an individual are the principal loan amount, the tenure of the loan and the interest charged. Even though many individuals try to calculate their monthly EMI on their own, this can be extremely risky. Incorrect calculations can lead to defaults in the repayment process which can cause serious problems to the individual borrower in the future.
This is why most financial institutions offer their customers with a home loan EMI calculator to help them calculate their EMIs. Calculating the EMI is an extremely important part of the repayment process of the loan. Financial institutions encourage their home loan applicants to use the tool both before applying for the loan as well as during the repayment process. The home loan EMI calculator can be used both to prepare as well as ensure on time payments.
The calculator is very easy to use and only requires individuals to type in the principal loan amount, the interest charged and the tenure of their loan. This tool helps you plan in advance how much loan you can afford. You can select the combination of principal loan amount, interest and tenure to best fit your needs. With the home loan EMI calculator you can plan in advance how to repay your loan. Since you are already aware of the amount you will be required to pay to the financial institution each month you can start saving up in advance for it.
During the repayment process of the loan, you can use the home loan EMI calculator to calculate how much you have to repay the financial institution each month. This particularly helps in cases where the borrower has opted for a floating interest rate. Unlike a fixed interest rate where the EMI remains fixed during the entire tenure of the loan, it constantly changes with floating interest rate. With floating interest rate the interest charged each month changes, the borrower has to calculate the new EMI each month. Doing so manually can potentially lead to incorrect calculations. Hence the home loan EMI calculator can be used to accurately calculate your EMI and ensure you repay your loan on time.
The repayment process of home loan is long and can financially burden the borrower. Hence it is crucial for the individual to use the home loan EMI calculator to ensure they repay their loan on time.
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, home loan EMI calculator that help to make the best decision.
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