According to recent reports, the current home loan demand rate of 28% is expected to touch 40% by 2025. Hence, it is evident that there would be a substantial increase in the number of individuals acquiring home loans over the next few years. If you are looking to avail a home loan, you must use a home loan calculator offered by reputed financial institutions like Bajaj Finserv to compute the EMIs to be paid against the advance.
Home loan EMI calculation
A potential borrower can manually calculate the equated monthly instalments for a particular loan by using the following formula:
EMI= [P x R x (1+R) ^N]/ [(1+R) ^N-1]
Here, P gives principal amount borrowed,
R denotes home loan interest rate applicable monthly,
N represents the number of monthly installments.
However, calculating EMIs using this formula can prove to be tedious. Thus, it becomes necessary to use a calculator for home loan EMI calculation.
A home loan EMI calculator is an indispensable tool that calculates the equated monthly installments for a particular loan in a few simple steps. In addition to this, it also allows a user to be informed about the interest amount which is due on the loan.
Computing the home loan EMIs to be paid would help you carry out the loan repayment responsibly, opening doors to earn several benefits, thereby boosting your credit score.
In turn, your credit score can determine your EMIs, should you avail of an advance in the future.
Apart from these calculators, financial institutions also provide pre-approved offers, which help in simplifying and accelerating the loan application process. These offers are available on various financial products like home loans, loans against property, and more. Borrowers can check their pre-approved offer by providing a few details such as name and contact number.
Steps to calculate EMI using a home loan EMI calculator
Listed below are the steps to calculate EMIs through a home loan calculator –
Step 1: Enter the home loan amount to be borrowed.
Step 2: Input rate of interest applicable.
Step 3: Fill in the loan tenor over which the loan would be repaid.
After a user enters the above data correctly in the respective fields, the home loan EMI calculator computes and displays the payable home loan EMI and interest amount applicable.
Further, like a home loan EMI calculator, one can also use a home loan eligibility calculator to check the amount that one can borrow based on the various parameter set by financial institutions.
Steps to calculate loan amount using a home loan eligibility calculator
Illustrated below are the steps through which a borrower can calculate the loan amount they are eligible to borrow by using a home loan eligibility calculator:
Step 1: Enter the date of birth in DD/MM/YYYY format.
Step 2: Select the place of residence.
Step 3: Fill in the net monthly salary.
Step 4: Choose your preferred loan tenor according to repayment ability and financial plans.
Step 5: Input details of other income sources if applicable
Step 6: Enter the total amount of current EMIs being paid for existing debt, if applicable.
Step 7: Click on the ‘check your eligibility’ tab.
After the final step, the calculator would display the maximum loan amount which can be borrowed. One can check for various loan amounts by varying the values entered in this calculator.
Hence it is evident that a potential borrower can benefit in several ways by using a home loan calculator and home loan eligibility calculator offered by reputed NBFCs.
