Buying a house is an aspiration for many. Most people avail themselves of home loans to fund the purchase. To purchase real estate property, people usually turn to house loans. The home buyer makes an upfront payment, and the balance amount is serviced through the acquired home loan. However, the borrower must repay the housing loan in installments to the lender.
If the borrower fails to repay the housing loan, he loses ownership of the house. Therefore, borrowers must plan their finances before applying for a housing loan. The home loan online calculator is a convenient online tool to help individuals plan and structure their home loans. Read on to understand how the loan calculator simplifies the loan planning process.
What is an online housing loan calculator?
A home loan calculator is an online tool that simplifies loan planning. Many trusted lending institutions offer online calculators on their websites to loan applicants. Loan applicants can use the calculator for free and plan their EMIs. Usually, applicants have to contact the lender to know the available housing loan schemes. With a loan calculator, there is no need for man-to-man interaction regarding calculations and payouts. A loan calculator allows individuals to enter different principal amounts and check the monthly installments. Usually, loan calculators have sliders that enable online users to adjust between different principal amounts and get the corresponding EMI amounts.
Besides adjusting the principal housing loan amount, users can also change the loan tenure and housing loan interest rates. One can try different combinations of principal amount and loan tenure. For each combination, the payable EMI will be displayed in real-time. When needed, online users can also view the entire loan distribution table. They will know how much to pay each month/year during the loan tenure. Individuals can also see how much interest they will pay throughout the housing loan tenure. An online EMI calculator shows all results in real time for free. There’s no limit on how many entries one can feed into the EMI calculator.
How does the EMI calculator help simplify loan planning?
As discussed above, loan planning is essential before submitting a housing loan application. You don’t want to apply for a larger housing loan than you can afford. Loan planning involves analyzing the monthly income and savings. People who do not plan before applying for a housing loan tend to miss EMI payments later. As a result, their creditworthiness decreases, and they might not be eligible to get future loans. How a home loan calculator helps with housing loan planning is as follows:
- Helps choose the right lending institution
Choosing the right lending institution for a housing loan may be confusing, as there are several options available. Individuals can research the interest rates of different lending institutions by visiting their websites. They can use the EMI calculator to know the total cost of a housing loan. Loan applicants can compare the total housing loan costs of different lenders and choose the one that best suits their needs and repayment capabilities.
- Helps choose the suitable repayment tenure
People are often unsure about the ideal housing loan repayment tenure. When you choose a long repayment tenure, the monthly installments will decrease. However, you might end up paying more interest on the loan. With a shorter repayment tenure, your EMIs will likely increase, but your overall interest payout will decrease. Therefore, it is better to analyze your monthly income and choose a repayment tenure that you can afford without defaulting. The EMI calculator allows you to try different combinations of repayment tenures and interest rates.
- Helps decide the pre-payment amount
While taking a housing loan, debtors have to make down payment upfront. The pre-payment amount is removed from the total principal amount of the loan. With an EMI calculator, one can know the entire cost of the loan. It will help you choose the right pre-payment amount according to your financial situation.
An online EMI calculator is easy to use for anyone. Choose the apt housing loan interest rate and repayment tenure with an online calculator. Compare different housing loan schemes with an online calculator now and choose one that suits you best!
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