Home Loan EMI Calculator

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Months

EMI Result

Loan Amount: ` 50,00,000
Rate of Interest: 8.5%
Tenure: 240 months
EMI: `
Total Payable Amount: `
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What is Home Loan EMI?

An Equated Monthly Instalment (EMI) is a loan repayment method in which a home loan borrower pays the principal amount and the interest in equal instalments every month to the lender until the loan is fully repaid. By calculating the EMI in advance, borrowers can know the amount of money to be kept aside every month, helping them manage their finances better. Thus, every EMI payment includes both interest and principal amount of the loan. At the start of the loan tenure, a large chunk of each EMI is devoted to interest payment. As the home loan nears completion, a higher component of the EMI goes towards the payment of the principal amount. Your credit score or credit history also plays a major role in your home loan EMI.

What are the Benefits of Knowing Your Home Loan EMI in Advance?

The advantages of knowing your home loan EMI in advance are as follows:

How Home Loan EMI Calculator Works

Most Home Loan EMI Calculators work on the basis of the following mathematical formula:

EMI Calculation Formula

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

In this formula,

EMI - Equated Monthly Instalment

P - Principal amount (amount borrowed as loan)

R – Applicable rate of interest (interest rate should be on a monthly basis)

N - Loan tenure or the number of EMIs to be paid (tenure should be in months)

Individuals can use the above formula to calculate their home loan EMIs either manually or through MS Excel. However, these EMI calculation methods can be time consuming and exhausting. Hence, it is best to use a housing loan calculator for the same.

How Home Loan Interest Rates Influence Home Loan EMIs?

When looking for a home loan, every borrower first enquires about the interest rate. This is because home loan interest rate is one of the major factors that influence house-buying power or affordability. It affects the overall cost of your home loan. Higher home loan rates increase the home loan EMI and reduce the ability to take on a larger loan amount. Lower home loan interest rates decrease the loan EMI and increase the possibility to:

  • take on a larger loan amount
  • take up a top up loan or a second loan
  • reduce the loan tenure
  • prepay EMIs as much as possible

As per your fund requirements and current financial situation you can choose any of the above options. However, it is advisable to prepay your loan as soon as possible in the initial years of the loan tenure. Doing so will reduce your loan burden and help you save on the interest amount, which you can further invest to build wealth. Fixed and floating rates options are also need to consider while applying for home loan.

Also Read: Home Loan Eligibility

How to Use Paisabazaar Home Loan EMI Calculator?

Paisabazaar Home Loan EMI Calculator computes EMI according to the following details provided by the user:

  • Loan Amount: Enter the amount you wish to borrow. It is the principal amount of the loan and the rate of interest is levied on it. The amount is defined by the cost of the property and the repayment capacity of the borrower.
  • Interest Rate: Enter the applicable interest rate. Home loan rates vary from one lender to another, so it is best to check rates before applying for a home loan. Home loan interest rates can be fixed or floating. The home loan interest rate remains the same throughout the loan tenure in case of fixed rates. However, for the floating type, the rates fluctuate with any change in the base rate and hence, the EMIs vary.
  • Loan Tenure: Enter the loan tenure as per your choice. It is the period in which borrowers repay the entire loan. Home loans usually have long repayment tenure of up to 20 years and in some cases even 30 years. Before choosing the loan tenure, remember that longer tenure leads to higher interest amount.

As soon as you enter these details in the required fields, you will get the result.

What are the Benefits of Using Paisabazaar Home Loan EMI Calculator?

Purchasing a house is an individual’s biggest investment, so it is important to do it right. Use Paisabazaar’s home loan calculator to compute EMIs beforehand so that home loan repayment does not become a financial burden. Paisabazaar Home Loan EMI Calculator is an online tool that takes you a step closer to deciding on the home loan you want to apply for, in the following ways:

  • Instant results: Our EMI calculator for home loans cuts short your lengthy and tedious arithmetic calculations to seconds. The EMI is calculated instantly, at the click of a mouse without the hassle of using a pen, paper or calculator
  • Easy-to-use: Paisabazaar’s online EMI calculator has been designed in such a way that anyone can use it without any prior training. You just need to enter simple details about your loan in the space provided or you can use the sliders for your inputs
  • Try different combinations: You can try different variations by adjusting the sliders in the calculator. You can change the amount, interest rate and tenure to reach an EMI amount which you find right for your home loan. You can recalculate your home loan EMI as many times as you want with Paisabazaar’s Home Loan EMI Calculator
  • Free: You can use this calculator any number of times you wish to without any cost. This online tool is available 24*7 on Paisabazaar website

Also Read: Documents Required for Home Loan

What are the Components of Home Loan EMI Calculator?

Usually, there are 3 components of the information you get from an EMI calculator:

  • Home Loan EMI: The home loan EMI is an amount that every borrower is liable to pay every month to its lender until the loan is fully repaid. It is the most important piece of information as it helps you know whether you can afford the loan.
  • Payment Breakup: The second component of the EMI calculation result is the break-down of the total amount that borrowers will be paying to their lender. This break-down will include details, such as principal amount, processing fee amount and interest amount.
  • Amortization Schedule: An amortization schedule is a systematic tabular display which details the periodic payments made towards a loan. When you pay an EMI, a portion of it goes towards the principal component and a portion towards the interest component of the loan amount. The percentage of EMI going towards the interest component versus principal can be determined by an amortization schedule. It contains all the necessary information related to home loan repayment, such as loan amount, period of scheduled payments and outstanding balance. It further provides the home loan EMI breakup detailing the repayment towards the interest and the outstanding principal of the loan. Financial institutions prepare the amortization schedule by employing complex mathematical calculations. The schedule helps borrowers make decisions related to prepayment or refinancing of the home loan along with providing the details of interest for availing tax benefits.