For an average salaried
middle-class person, the only way to own a house is by availing of a home loan.
But the trick here is to strike the right deal and a loan that fits your budget,
which is not an easy one to crack. It is especially challenging if you are a
first-time borrower. Nowadays, though, it is possible to accurately calculate the
loan amount and payable EMIs before approaching the lender
You can also use the unique tool available on third-party and lender
portals called the home loan EMI
calculator. They are free of cost and can use them innumerable times.
Following are the
reasons to consider the calculator –
Financial planning: One of the finest tools available on the internet is
the EMI calculator. It prepares you for the EMI needed to pay off and predict
the payable amount accurately. It is a tool freely available and is flexible as
well. You can use it unlimited times for understanding how much you need to pay
across different interest rates and tenure combinations by comparing varied
lenders. Importantly, it makes aware whether it is sensible to take a housing loan
now or postpone it for later when it becomes affordable
Plan EMIs: Every lender asks you to offer a break-up of your
monthly income and the ideal way to utilise them. It helps determine if you can
afford the EMIs after making the mandatory expenses. Typically, lenders require
the applicant to not spend more than 40 per cent of their income towards the
EMIs. If you fail to meet the expectations, the loan may get rejected. The
margin is mandatory for passing the application. The margin gets adjusted by
tweaking the loan tenure since higher loan tenure could result in reduced EMIs.
This is possible if one uses the EMI calculator. With reduced EMIs, you can
plan your monthly budget and miscellaneous expenses.
Accurate parameters: Every lender offers different interest rates, levies
different processing fees, and other necessary changes for passing the loan. While
many lenders provide a house loan for 20 years, only a few extend it up to 30
years. You need to compare different lenders for finding the right loan amount,
interest rates, and duration. Essentially, you need to find a loan deal that
fits your bill. Today, every lender has an EMI calculator on their portal,
which is easily accessible and hassle-free to use. This exercise helps one
determine the best lender in the market and proceed with the credit.
Approval process: One of the critical aspects to get the credit approved from the lender is holding adequate knowledge about the additional charges levied and the preparation for repaying the loan. You should also be aware of the interest rates, minimum and maximum amount offered, and the term of the loan. Since you can calculate the payable EMI using the calculator, you should be prepared about the associated loan costs and understand if they are affordable. This knowledge about the lender and other aspects of the credit gets derived from the calculator and increases the chances of getting the home loan approved.
