When you apply for a home loan, one of the critical factors you must consider is the EMI as it has a direct impact on affordability. Read on to know more why you must use an EMI calculator to compute your EMI beforehand and how it helps in easy repayment.
When you apply for a home loan, you may invariably come across the term, home loan EMI calculator. But do you know what it is? A home loan EMI calculator is an online tool that helps you compute the exact EMI amount that you must repay to the lender against the amount you borrow.
The EMI (Equated monthly Instalment) that you pay to the lender depends on a few critical factors like the amount you borrow, the duration of the loan you choose, and the rate of interest levied by the lender. The calculator is one of the best financial tools that every home loan borrower must use to plan their finances well to make the repayment easy throughout the loan tenure.
If you are still not sure how using EMI calculator for home loan helps in easy repayment of the loan, you must be aware of its following benefits.
Simplifies EMI calculation
One of the most significant benefits of using an EMI calculator for home loan is that the tool helps you determine the exact EMI amount for the loan you borrow. You can use this tool even if you don’t have any technical knowledge. To compute the EMI using the tool, all you need to do is enter the details like interest rate, loan amount, and the duration in the calculator and it will automatically compute the amount within a few minutes.
Choose the right lender
The EMI amount varies based on the interest rate. Thus, by using the EMI calculator you can compare the schemes from different lenders and choose the right financial organisation that offers the loan at the lowest interest rate so that the EMI is affordable. Thus, the tool helps you choose the right lender and have a hassle-free borrowing experience.
Choose the right loan tenure
By knowing the exact EMI that you must repay every month, you can choose the right tenure. If you can afford to repay a higher EMI, you can opt for a shorter tenure. But, if you are facing a cash crunch or cannot afford paying higher EMI, you can increase the loan duration so that the EMI is affordable. The maximum period for which you can borrow is 30 years. Thus, you can choose the duration as per your repayment capacity.
Know the exact loan cost
Most of the lenders present the EMI as a percentage of the amount borrowed, however, they don’t provide details of the various charges including in the EMI. By using the home loan EMI calculator, you can know the exact break-up of the charges involved, including the total interest payable, the processing fees, etc. Knowing these charges will help you know the exact loan cost.
Verify the information
While negotiating with a lender, you can use the home loan EMI calculator to cross-check the information provided by them regarding the repayment schedule. However, you must know that, sometimes the numbers may be different because the lender may also include other charges while calculating the EMI amount. However, the tool can help you verify the information provided by the lender.
Thus, with so many benefits, you can use the home loan EMI calculator to plan your finance well and repay the amount easily.