Many lenders offer online EMI calculators to estimate your total outgo for home loan repayment. The EMI calculator shows a complete breakup of the principal and interest amount you have to pay over a predefined period.
While using the home loan EMI calculator, you need to enter three important details — loan amount, loan tenure and the interest rate.
So, while calculating the home loan EMI, it’s important to choose the right tenure and loan amount as per your needs as well as your ability to pay off the loan. If you choose a longer tenure, the EMI amount will go down, but the overall interest rate will increase.
On the other hand, a shorter tenure will increase the monthly outgo, but the payment for the interest component will be lower. It’s also advisable to compare various loan offers and choose the one that offers the lowest interest rate. Your EMIs may also change if you opt for a floating rate home loan.
Let’s understand the home loan EMI calculation through an example:
If you are looking forward to applying for a loan of Rs 50 lakh, the EMI will be Rs 43,391 every month at an interest rate of 8.5%.
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Principal amount: Rs 50 lakh.
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Interest amount: Rs 54.13 lakh.
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Interest rate: 8.5% per annum.
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EMI: Rs 43,391.
Even though lenders may finance a large part of the property’s value, it’s advisable to reduce debt by making a substantial down payment. This will lower EMIs and overall interest burden. It’s also advisable to evaluate EMIs for different amounts and tenures to choose the best loan offer and a hassle-free repayment.
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