How Important is Home Loan EMI Calculator to You? A home loan is a long journey that can span for as long as 30 years. In these years, one can go through different circumstances - some pleasant, some not so. But one thing for sure, you need to make the payment no matter what all situations you may face. If you deviate from the same and default continuously, the lender may seize your property. To ensure it doesn’t happen, you must get an idea of the monthly obligation i,e, Equated Monthly Installment (EMI) in advance. You can thus use the Home Loan EMI Calculator to know what you have to pay over the loan tenure. Let us read how does the calculator work and ease your life. Operational Dynamics of Home Loan EMI Calculator The Home Loan EMI Calculator, as the name suggests, provides you an estimate of the EMI, a combination of interest and principal payable over the loan term. It also shows you the interest you’ll end up paying to the lender. All you need to do is to go online and use the loan amount, tenure and interest rate. If you watch the calculator carefully, you will see the interest portion constituting more of the EMI in the first half of your loan journey. In the second half, it’s the principal portion that becomes heavier. How Will the Home Loan EMI Calculator Help You? As the calculator draws a repayment summary, you can plan your budget accordingly and ensure a timely payment record. You can thus factor in your income and the EMI you have to pay, to plan your expenses. With no debt, you have the luxury to spend. But with debt and that too a home loan, you need to be careful. There lies your job to redefine your income and spend with discretion. Amortization Schedule - A Part of EMI Calculator That You Must Know If you check the calculator closely, you will see the amortization schedule indicating the principal and interest you will pay periodically. Additionally, you will see the outstanding balance that’s likely to be the case every year. You will ask, how does this schedule matter to you? As told earlier that a home loan runs for long, so the schedule will help you close out the loan before the stipulated time. So, if you are looking for a 20-year loan, you can close it by the end of 15 years or even before. Yes, it’s possible by generating the desired corpus by investing in products like mutual funds, fixed deposits, etc.
How Much Does the Interest Rate Impact Your Home Loan EMI? The interest rate decides to a great degree the amount of EMI. Greater the rate of interest, more will be the EMI and vice-versa. Even a difference of 1% in the interest rate can bring a substantial difference to the overall repayment. So, look to deal with the lender that offers you a home loan at lower interest rates. This will only bring down the EMI but also the quantum of interest over the loan term.