A real estate investment is bound to grow exponentially because of land scarcity and growing demand. Owning the dream house is one of the most remarkable achievements in most people’s life.
Over the past decade, the growing cost of housing has made it difficult for the common person to afford one. However, modern banking and financial institutions have made it easier for people to own a house through home loan products.
Read on to learn more about home loans and how you can plan your home loan with an EMI calculator.
What is a home loan?
Nowadays, a home loan is a secured loan that uses collateral to secure the purchase of a property. There is a wide range of home loan products that provide financing for the purchase of a house, including specialized options like a loan for land purchase, which specifically caters to individuals seeking funds to buy land for residential purposes.
In most of these loans, the lending party covers 70 to 90% of the total cost. An initial down payment between 10 to 30% of the entire amount is required from the home buyer. Home loans usually have a very nominal interest rate, anywhere between 6 to 14%.
Understanding EMI calculator for home loans
Today, most banking and other financial institutions offer an online platform where users can avail themselves of different home loan products. One of the best things about these online platforms is the availability of EMI calculators.
A home loan EMI calculator is a financial tool that helps users estimate the monthly EMIs they will need to pay if they take a home loan.
The three key factors that influence home loan EMIs are changed to calculate different EMIs. This includes the principal amount, the rate of interest, and the loan tenure.
How does the home loan EMI calculator help to plan your loan?
Buying a home is a remarkable achievement and financing your property using home loans comes with certain financial commitments. Checking for home loan eligibility is a must before starting with the online application.
Once you have checked the home loan eligibility and fit the description, it is time to check the exact EMI amount using the EMI calculator. Planning your EMI is crucial to timely repaying the loan amount without any late payment penalties.
Here are some important benefits of using an EMI calculator for planning your home loans:
Accurate calculation of the installment amount
A loan amortization calculator is a financial tool that calculates the EMIs based on the principal amount, interest rate, and loan tenure.
You can easily calculate the exact monthly installment amount that they will need every month. This will help to create the right budget.
Helps to compare different lenders
EMI calculators can help you compare the monthly installments from different lenders for the same loan amount. You can easily compare two or more lenders and choose the best one, depending on your repayment capacity and borrowing needs.
Pick the right amount and tenure
The right loan amount can be picked, depending on the cost of the property, using an EMI calculator. You can easily check the EMI amount for different loan tenures and principal amounts.
You should choose a longer loan term when your monthly budget is low. This will save you from any defaults in the future.
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Conclusion
Using an EMI calculator for home loan is a great financial way to plan your budget. One can easily find an EMI amount they are comfortable with by changing the key metrics of an EMI calculator, including the interest rate and loan tenure. Make use of it to plan well and choose the best offer available!
