Use Home Loan Calculator To Sort Housing Finance

By Author: Hi,I am Alex Smith
Total Articles: 6

Loans nowadays are an integral part of our lives that help us attain some important financial goals. Be it car or buying a home, sending kids to abroad for higher studies or foreign vacation, loans have been the most preferred sources of finances.
Often while talking about loans, the first thing that comes to our mind will be Equated Monthly Installment (EMI) that would be set upon to clear our debt. Some loans such as housing finance are long-term finances and require thorough calculation before you come up to any EMI consensus. It needs lots of pros and cons sitting with your financial expert to decide upon the loan amount, interest rate offered, processing fee applicable, etc. Therefore, most of the leading banks and finance companies have come up with an easy to understand home loan calculator. These calculators let you understand the loan concept in a precise way. EMI payments include both principal and interest on the loan amount. The interest component constitutes the major portion of the EMI payment in the initial stages. As the loan tenure progresses, the portion of interest repayment reduces and contribution towards the principal repayment increases.
When you put the required loan amount, your home loan calculator gives a loan amortization schedule which is a tabular presentation of the loan with the EMI payments. The table shows the break up between the interest compound and the principal component of a particular EMI payment.
The main advantage of this tabular format is investor can examine how the loan repayment will go ahead and how much outstanding balance is left to be paid. It helps investors to prepare themselves pre-hand, cut down the unnecessary expenses and manage finances for EMI payments. It contains information like the time period of payment, EMI, interest, principal payment and the outstanding loan.
An EMI of any home loan would be influenced by three factors: Loan Amount – It stands for the total amount that has been borrowed by the individual. Interest Rate – It stands for interest rates charged whether fixed or floating based concept. Tenure- It would be the amount of time decided upon by the borrower and lender to clear off the debts.
With home loan calculator the usually tedious and time consuming task of manually calculating the EMI applicable on your home loan gets simplified. You get the essential data, including amortization details and the ability to alter components like interest rates, tenure, principal amount and try different permutations and combinations.
EMI of your home loan is directly proportional to loan amount & interest rates and inversely proportional to the tenure of the loan. The higher the loan amount or interest rate, higher would be the premium and vice versa.
It is important while using home loan calculator you should consider following parameters for efficient results: Loan Amount, Interest Rate Applicable, Tenure of loan repayment, processing fee, pre & post penalty closing charges, etc. Home loan calculations have now become easy and simplified with these calculators. So, utilize them for your benefits and bank a suitable opportunity, now!