A Home Loan EMI (Equated Monthly Installment) Calculator is a practical online application that calculates the monthly payments you need to make towards your home loan. By entering details like the loan amount, interest rate, and loan tenure, the calculator provides a detailed breakdown of your monthly installment, which includes both the principal and the interest components. This tool is invaluable for anyone managing or planning substantial financial commitments such as purchasing a home, enabling better budget management and more strategic financial planning.
How Home Loan EMI Calculator Works
A home loan EMI calculator is a financial planning tool that helps you calculate the EMI, interest amount payable, and the total home loan amount. The calculator requires a few inputs to work:
- Borrowed Amount: The amount of loan you want to borrow for the purchase of the house.
- Loan Tenure: The amortization period for the repayment of the home loan.
- Rate of Interest: The interest rate that the lending institution will charge on the loan.
The home loan EMI calculator will use these inputs to calculate and show the EMI amount, total payable interest, and total repayment amount. You can also change the inputs, and the calculator will show you the results accordingly.
Formula Used in Calculation of Home Loan EMI
The formula for home loan EMI is:
P x R x (1+R)^n/{(1+R)^n-1}
where,
- P is the principal loan amount borrowed
- R is the applicable monthly home loan interest rate
- N is the total loan tenure in months
Illustration With an Example
Suppose Gaurav took a home loan of Rs 60,00,000 for 20 years at an interest rate of 6 percent per annum.
Here,
R (monthly interest rate) = 6/(12x100) = 0.005
N (loan tenure in months) = 20 x 12 = 240 months
Your EMI will be: 60,00,000 x 0.005 x (1+0.005)^240/238 = Rs 42,986
Total interest payable = Rs 43,16,606
Total payable amount (principal + interest) = Rs 1,03,16,606
Calculation of home loan EMI can be complex and time-consuming as it requires a number of inputs and complicated calculations. A home loan interest rate calculator does all the work and shows you the EMI, interest payable, and total payable amount within a moment.
How to Use Home Loan EMI Calculator?
A home EMI calculator is an easy-to-use online tool. You need to follow a few simple steps to use the online home loan calculator:
1. Open an Online Home Loan EMI Calculator: There are plenty of options available online. INDmoney’s home loan EMI calculator is simple to use and calculates your loan EMI instantly.
2. Enter the Loan Amount: Input the amount you want to borrow.
3. Enter the Repayment Period: Specify the loan tenure in years.
4. Enter the Interest Rate: Input the interest rate charged by the lender.
5. Calculate EMI: The calculator will show the EMI, interest payable, and total payable amount instantly.
You can also adjust the inputs to compare different loan offers and choose the best option for your financial situation.
Benefits of Using INDmoney’s Home Loan EMI Calculator
- Effortless Planning: Simplifies housing finance planning by providing crucial details like monthly installment (EMI), net interest payable, and the total amount due.
- Time-Saving: Delivers instant results, saving you valuable time and effort.
- Comparison Made Easy: Evaluate home loan offers from various lenders by calculating EMIs at different interest rates.
- Optimal Loan Tenure: Determine the ideal loan tenure based on your repayment capacity by considering your monthly income, expenses, and savings.
Using INDmoney’s Home Loan EMI Calculator ensures that you make informed decisions while simplifying your housing finance journey.
Home Loan Interest Rates
Home loan interest rates in India significantly influence the affordability and feasibility of homeownership. These rates vary across banks and financial institutions, often impacted by changes in the country's economic conditions and government policies. By using our online Home Loan EMI Calculator, you can effortlessly assess how these rates affect your monthly installments and overall repayment.
HDFC Home Loan Interest Rate
HDFC Home Loans offer affordable options with interest rates starting at just 8.60% per annum. You can begin your home loan journey with an EMI as low as Rs. 762 per lakh for loan tenures of up to 30 years.
SBI Home Loan Interest Rate
State Bank of India offers home loans at attractive rates starting from 9.15% per annum, with a flexible repayment period of up to 30 years. The processing fee is just 0.35% of the loan amount (Min. Rs. 2,000; Max. Rs. 10,000) plus taxes. Women borrowers enjoy a special 0.05% interest concession on SBI Home Loans.
Key Determinants of Home Loan Interest Rates
- Credit Score: A high credit score (usually 750 or above) signifies responsible credit management and can lead to lower interest rates.
- Income and Employment Type: Stable employment in government, PSUs, or reputable private firms can lead to lower rates.
- Type of Home Loan: Different home loan types have varying rates. Regular home loans have standard rates, while specialized loans may have higher rates.
- Loan Amount: Smaller loans typically carry lower interest rates.
- Concession for Women: Some lenders offer lower rates for women borrowers.
- Type of Interest Rate: Fixed-rate loans maintain consistent EMIs, while floating rates fluctuate with market changes.
Understanding these factors can help you secure a favorable home loan interest rate tailored to your financial circumstances.
Home Loan Eligibility
To determine your eligibility for a home loan, you'll need to meet certain criteria:
- Nationality: Indian residents, NRIs with an Indian passport, PIOs with a passport from another country, or OCIs.
- Age: Typically, at least 21 years old to apply. Co-applicants can be 18 years or older.
- Financial Status: Salaried or self-employed individuals.
- Creditworthiness: A positive credit history and good credit score.
- Existing Liabilities: Current financial obligations are considered.
Meeting these criteria is crucial when applying for a home loan, as they significantly influence your eligibility and loan terms.
Benefits of a Home Loan
- Investment: Buying a house serves both as a place to live and an investment that generally appreciates over time.
- Low Interest Rate: Home loans can have interest rates as low as 6 percent.
- No Additional Collateral: The home itself serves as collateral.
- Tax Benefits: Sections 24(b), 80C, 80EE, and 80EEA of the Income Tax Act allow you to claim home loan interest deductions.
Frequently Asked Questions
How much home loan can I take?
Banks and other lenders generally approve loan amount of up to 70-90% of the cost of the house. The final sanctioned loan amount depends on your monthly income, credit history and type of employment as well.
Can I take home loan for an under construction property?
Yes, you take a home loan for an under construction property as well.
Can I take a second home loan and claim interest deductions from my income?
Section 80EE and Section 80EEA allow interest exemption from taxable income only for the purchase of the first house property. This means if you already own a house property, you cannot claim these tax exemptions for the purchase of another property.
Can I repay my home loan early?
Yes, you can repay your home loan early and save interest. This is called prepayment or foreclosure of the loan. However, you must check the foreclosure charges (if any) charged by the lender.
Can I apply for a joint home loan?
Yes, you can apply for a joint home loan easily, provided that the co-applicant is one of your immediate family members.
Can I change my EMI during the loan tenure?
In some cases, yes. EMI can be adjusted through loan restructuring, prepayment, or refinancing. This depends on the lender's policies and the terms of your loan agreement, so check with your lender for options.
What happens if I miss an EMI payment?
Missing an EMI payment can lead to late fees, increased interest, and a negative impact on your credit score. Consistent defaults might even lead to legal action or foreclosure. Always communicate with your lender in case of issues.
Does a longer loan tenure reduce my EMI?
Yes, a longer loan tenure typically results in lower monthly EMIs, as the loan amount is spread over a longer period. However, this also means paying more interest over the loan's duration, increasing the overall cost.