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How To Work Out Your Emis For A Home Loan

By Author: Mayur Sheitty
Total Articles: 112

Various financial institutes are providing different home loan packages, to meet the diverse needs of home buyers. However, like any other loan application process, one would need to take careful considerations of all the important constituents of the home loan, namely the EMIs.

EMI’s amount to the fixed fund, a home loan applicant would need to pay a lender on a fixed schedule. This will be undertaken; till the time the whole loan is completely repaid. Additionally, the method in which one would need to pay off the EMIs also plays an important aspect in one’s financial management. One way to do so is through a planned automatic system and one’s bank account. Through this process, one needs to have sufficient funds in the account, especially at the designated time wherein the funds will be deducted. Alternatively, one can physically make the payment. However, one should ensure that one has sufficient funds to make this payment at the required time.

Additionally, one needs to ensure that this process is maintained till the repayment tenure is met. Since most home loans last between 10 to 30 years, this is a lengthy time for one to considerably plan. Additionally, one would also need to take into account the possibility of changes in one’s financial profile, such as change of job, unexpected medical expenditures, increase in household expenses or an increase in a number of dependents amongst many other reasons.

While the planning process may seem challenging, one would also need to consider the consequences of not paying the EMIs on the designated date. While financial institutes provide a scope of flexibility on a few late repayments, consecutive delays can lead to a penalty. Additionally, it can also affect one’s credit score, which in turn, will affect one’s future loan applications.

As one can see, planning EMI’s for a home loan is vital, before beginning the application process. But with the right strategy and scheduling, one can easily plan one’s EMIs for a home loan. There are two ways one can calculate the EMIs, namely through a formula or through the EMI calculator for a home loan. The calculation through the formula is as follows:

EMI = [P x R x (1+R)N] / [((1+R)N)-1], where
P = Principal amount borrowed
R = Interest rate per month.
N = loan duration calculated in months throughout the tenure.

As one can see, the formula is simplistic. However, one does not have the flexibility and quick results when it comes to changing different values for varied results. This is where one can use the EMI calculator for a home loan. Most financial institutes provide their own calculators through their own websites, with prefixed interest rate range. By using this tool, one can not only get quick yet adjustable results but also the means to compare different offering by different competitors. Through this way, one can get a better idea of what is the best offering and how can one make the most of it to suit one’s needs.

Author Bio :

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

Total Views: 109Word Count: 550See All articles From Author

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