Repaying a home loan can be quite challenging if you do not take the necessary steps before applying for one. A home loan EMI calculator is one tool which helps you prepare for the loan before even taking one. Although you use the generic calculator available on the portals of the home loan issuers, it is ideal to use an advanced one. This is what you need to know.
What is an advanced calculator?
These are unique instruments which help calculate the cost of the housing loan accurately. Unlike the basic calculator, which only includes tabs like principal amount, interest rates, and tenure, this calculator computes every aspect such as repaying a home loan, thereby preparing you for the loan thoroughly.
The process to use the calculator
Property value
In the first tab of the EMI calculator for home loan, add the market value of the property you wish to buy.
Down payment amount
In the advanced calculator, the second tab is the down payment tab. Here, you need to include the percentage of the amount you can afford as a down payment or margin towards the loan. Note, you need to pay a minimum margin of 20 per cent of the property market value.
Loan insurance amount
Many lenders prefer insuring their house loan. If you are such a person, enter the insurance premium amount in this tab of the instrument.
Principal amount
Add the principal loan amount you seek to borrow. The formula used to calculate the principal sum is housing value + loan insurance – margin.
Interest rates
You should enter the interest rates you can afford for paying against the loan. Consider aspects like your budget and income. Remember, you might not necessarily get the lowest interest rate.
Loan tenure
Check the minimum and maximum loan term offered by the lender. Consider your preferred duration and enter the figure in months in the calculator.
Associated costs
Input all the associated costs with the loan, which are the processing fees, administration and evaluation fees, stamp duty, etc.
Property taxes
Find out the property tax payable against your asset from the builder or previous owner ad add the amount in percentage in the property tax tab.
Monthly expenses
The final tab in the home loan EMI calculator is the monthly expenses wherein you include the average amount of associated costs with monthly maintenance of the asset.
Calculate the EMI
After adding all the details, click enter or submit for finding the exact cost of the loan over the entire tenure. The EMI calculator for home loan decides your budget and affordability accurately.