Individuals seeking a home loan should understand that taking a home loan needs a long-term financial commitment. This secured loan’s tenor can last up to two decades until the entire principal amount and interest payable are not paid off. A home loan is one of the biggest loans individuals can opt for; hence future loan applicants should consider their affordability and finances before taking a home loan. A simple aid to this situation is to use a home loan calculator.

What is a home loan calculator?

It is an online tool that helps estimate the payable home loan EMI against the borrowed funds. The three basic components for using this calculator are mentioned as follows:

  • Principal amount

It refers to the total amount of loan that a borrower lends. The principal amount is the direct proportion to the monthly instalments, i.e., a lower principal amount indicates lower EMIs and vice versa. 

  • Rate of interest

It mentions the rate of interest at which lenders are willing to give the loan. Certain factors of the borrower like employment status, financial condition, and age are considered when determining the rate of interest. 

  • Loan repayment tenor

The loan repayment tenor determines the maximum time within which the borrower has to repay the entire loan amount, including interest payable. A longer loan tenor means lesser monthly instalments. 

How to use a house loan calculator?

Following the steps mentioned below, borrowers can easily use a home loan calculator: 

Step 1: Go to the home loan calculator section on your lender’s website.

Step 2: Enter the total loan amount that you wish to borrow.

Step 3: Select the loan tenor within which you plan on repaying the entire loan with the interest amount.

Step 4: Mention the rate of interest against which you wish to take the home loan. 

Further, click on the submit or calculate button, and you will get the exact division of monthly instalments, total interest payable, and the principal amount. 

Benefits of using a house loan calculator

As a potential borrower, now that you know how to use this online tool, the benefits of calculating EMIs will seem of utmost importance. Some of the key advantages are: 

  • Accurate results

With the use of an online house loan calculator, borrowers can understand the different financial charges that are associated with the home loan. Charges like total interest payable, stamp duty, registration charges, and loan processing fees. These charges carry a substantial amount, and most lenders present them as percentages over the principal amount and not the exact amount. Thus, knowing the actual loan value and deducting all associated values from it helps borrowers determine exact loan terms. 

  • Hassle-free

An online home loan EMI calculator can keep borrowers safe from the hassle of manual calculations. Manually calculating home loan can be tedious, complex, and has maximum error percentages, because it is impossible to calculate home loan EMI for 20 years and not make a mistake. On the other hand, using a home loan EMI calculator ensures accurate answers within a matter of seconds. Borrowers can even input different combinations of loan tenor, amount and interest rate to check what suits their financial status the best. 

  • Helps to choose

Different lenders or financial institutions offer different home loan interest rates. However, even a difference of 0.05% can also make a big difference in one’s monthly instalments. Here lies the benefit of using a home loan EMI calculator. Using this tool, borrowers can easily compare offers across various lenders and then choose a lender that offers benefits that suits the borrowers’ profile the best. 

  • Initiates financial planning

With the use of a home loan online calculator, borrowers can get a general idea of their monthly payable EMIs towards their credit. As a result, borrowers can plan their overall finances similarly, maintaining a strict budget so that their essential expenses remain unaffected. 

  • Financial management

It is quite natural that you might be paying more than one loan at a time as a borrower. It is essential for borrowers to be aware of their financial condition to not be affected by multiple loans. However, using a house loan EMI calculator, borrowers can choose the loan tenor and interest payable wisely, keeping in mind payable EMIs for other loans. Thus promoting financial management for their borrowing situation. 

Furthermore, most lenders and financial situations offer pre-approved offers to their existing customers. These pre-approved offers can simplify the overall loan process and accelerate the process. Borrowers can avail of these pre-approved offers by simply entering their names and contact details. You can easily check your pre-approved offer by entering your contact details.


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