Tuesday, September 27, 2022

Home Loan EMI Calculator: An Effective Tool for Home Loan Planning

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Aspiring home buyers have a lot to look forward to – the purchase of their dream home, moving their families into the new property, and setting up the house to make it their own. What makes this easier is a home loan that lets you choose your dream property without penny pinching or budget constraints.

Home loan lenders are making competitive offers, making it all the more appealing for home buyers. Starting from comparatively low home loan interest rates to substantial loan sanctions, going up as high as Rs. 5 Crores for eligible applicants – there are several aspects of a home loan that makes it a feasible property funding option for first-time and young home buyers. However, to ensure eligibility for the most lucrative deal a lender has to offer, you must adequately satisfy their home loan eligibility criteria.

Every mortgage loan lender has a set of eligibility parameters to assess the borrower’s financial profile and repayment capability. It allows them to extend a loan amount that fits their repayment capacity, thereby avoiding or minimising the possibilities of bad loans and loan defaults. It not only benefits the lender, but also the borrower – there is no sense in borrowing an amount that is unmanageable, as defaulting on loan repayment not only impacts their credit scores but can also lead to serious legal implications.

Bearing these factors in mind, aspiring home loan applicants should try to prepare a home loan application that suits their needs and matches the lender’s eligibility benchmark. Apart from the initial lender research and comparative analysis, applicants can also consider using a home loan EMI calculator to evaluate the potential costs of borrowing their home loans.

Home Loan EMI Calculator: What Does it Show?

Before we move to its uses and benefits, let us first understand how the home loan EMI calculator tool functions and the results it computes. The tool is available to all and is hosted online, free of cost. While several lenders have their calculator tools, all built with different features, all require the following inputs –

  1. Your desired loan amount, or the home loan principal amount
  2. Your preferred repayment tenor, or the time you will take to repay the loan amount
  3. The current home loan interest rate, or the interest rate you would ideally like

Based on these inputs, the tool calculates your tentative EMI amount while also forecasting a repayment schedule. What having these numbers allows you to do, is assess whether such an EMI amount is feasible for you to repay for an extended period. By giving you a repayment schedule, the calculator also pre-emptively helps you put together your repayment plan – which is of assurance to your future lender, as it speaks well of your repayment intent.

Not just that, having a plan prepared beforehand will also help you budget your finances better and always have your EMI amount handy without any last-minute surprises.

Home Loan EMI Calculator: Benefits for Home Loan Applicants

Having understood the functionality of the home loan EMI calculator tool, you will now appreciate its benefits better. All home loan applicants are advised to use the tool before applying for a home loan, as making a tailored application sharpens your chances of home loan approval. Here is how you can benefit from using the tool in your application journey:

1. Accuracy in Home Loan Planning

As the tool computes your results instantly, you no longer have to rely on manual calculations – minimising the margin of error in your home loan planning. Having accurate numbers helps you understand your repayment obligation and plan accordingly.

2. Easy Lender Comparison

There is no cap on the number of times you use the home loan EMI calculator tool, so you can use it to make lender comparisons. You can enter several principal amount and interest rate combinations (depending on what each lender advertises to offer) and calculate your EMI payable. Knowing the results lets you assess each lender offering, based on your financial profile.

3. Beneficial for Repayment Planning

The primary benefit of using the calculator is planning out your repayment process before applying for the home loan, so you can anticipate your total cost of borrowing and insulate yourself against any cash-shortfall, so you don’t miss an EMI payments.

Final Thoughts

To make the most of exclusive offers and competitive deals, home loans applicants should first use the home loan calculator tool to define their home loan eligibility and then tailor their application accordingly. It is not only easy and hassle-free, but also enhances their chances of being approved for a speedy disbursal.

Disclaimer: This article is a paid publication and does not have journalistic/editorial involvement of Hindustan Times. Hindustan Times does not endorse/subscribe to the content(s) of the article/advertisement and/or view(s) expressed herein. Hindustan Times shall not in any manner, be responsible and/or liable in any manner whatsoever for all that is stated in the article and/or also with regard to the view(s), opinion(s), announcement(s), declaration(s), affirmation(s) etc., stated/featured in the same.



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