How Using An EMI Calculator Is Beneficial For Housing Loan Interest Rate?

EMIs or Equated Monthly Installments are periodic monthly payments that the borrower makes towards the loan repayment of the borrowed amount. The EMI payment consists of the principal loan amount and the interest accrued for the period. All types of loan repayments, such as personal, medical, home, etc., can be converted into EMIs. EMI calculator is an easily accessible tool to accurately arrive at the monthly figure of the loan installment to be repaid. This tool is mainly used before applying for a loan to decide the best suitable offer you can get from multiple banks and NBFCs.

Many people who opt for a housing loan are advised to choose EMIs as their repayment.

What are the advantages of using a housing loan EMI calculator?

A housing loan EMI calculator has been proven very helpful. Some of the several benefits of an EMI calculator are as follows.

1. Decision on how much to borrow

Using a housing loan EMI calculator helps you decide the minimum amount suitable to finance the requirements where repayment is also manageable, and the housing finance is also sufficient. In addition, the EMI calculator helps you analyse and arrive at an amount that fits your monthly budget. Therefore, it ensures you make an informed decision on financing your home.

2. Planning the repayment

Calculating the EMI for your housing loan with interest can help you plan the repayment. Calculating the EMIs in advance will adequately advise you on which financing source to opt for and how to budget the principal and interest amount repayment.

3. Choosing the most suitable source

Through housing loan EMI calculators, you can make an informed decision about what source of financing would be best out of the current market offers. In addition, you can choose the best interest rate along with a flexible repayment plan according to your budget if the EMI is calculated in advance as per the loan requirements.

4. Planning Prepayment

Prepayment planning can help you reduce interest payments and repay the housing loan sooner. You can calculate this schedule and formulate a prepayment plan in advance through the EMI calculator.

5. Credit score

Using the EMI calculator and keeping up with the monthly payments of the principal loan amount and interest can help you maintain a good credit rating and score. Overall, this increases your creditworthiness, and the bank may consider making the housing loan offer more flexible during its tenure. It is further beneficial while applying for loans for financial support in the future.

6. Future borrowing

You can maintain your creditworthiness using the EMI calculator, making it convenient for you to get any loans sanctioned in the future without hassle. Banks and NBFCs offer loans at a lower interest rate and flexible repayment tenure if your credit score is high.

7. Ease of use and accuracy

The housing loan EMI calculator is an easy-to-use tool and gives accurate results to arrive at the best possible option for loan repayment. Its automated feature of computing the EMI is very user-friendly and can be used by everyone. The tool is freely available at no additional cost and provides quick and accurate results for decision-making.

How does the EMI calculator work?

The EMI calculator requires you to enter the essential loan details in the bars. The details required are the principal loan amount, the loan tenure, and the interest rate charged on the loan. The formula for calculating EMI runs on the tool and produces a final installment figure that you will need to shell out per month for the fed-in housing loan plan. You can change the principal amount, the interest rate, and tenure combinations to check the most suitable EMI plan.

Conclusion

In today’s time, easy accessibility and availability of this tool are making it highly convenient for many home loan applicants to plan their financing in a better way. The housing loan EMI calculator provides all the information they require to make an accurate budget and keep up with all the payments. Making the best choice out of several home loan options available in the market is the most critical step, and the housing loan EMI calculator makes it easier to arrive at an accurate and well-suited option.