The EMI (Equated Monthly Instalment) mode of payment enables a borrower to re-pay the loan amount on equal monthly instalments. It includes repayment of the principal amount and interest payment on the home loan’s outstanding amount. However, manually computing EMIs can be tricky as it may comprise errors. This is why using a home loan interest calculator is recommended.
How to calculate home loan EMI?
The formula for computing EMI on a home loan is:
P x R x (1+R) ^N / [(1+R) ^N-1] where-
P = Principal amount
N = Loan tenor (in months)
R = Monthly / Annual interest rate
To do away with this tedious calculation and avoid chances of errors, reputed financial institutions provide an online home loan interest calculator to simplify the process.
Applicants can determine the EMIs by providing three information on the calculator to get accurate results including:
- Principle amount
- Tenor
- Interest rate
Features of housing loan EMI calculator
- The EMI calculator for home loans is an online platform where a customer easily analyses his/her monthly loan instalment.
- A borrower only needs to enter the desired loan amount, interest rate, and loan tenor.
- The house loan interest calculator will determine the amount a borrower has to pay per month.
- Nevertheless, the home loan interest calculator facilitates borrowers to schedule their home loan repayment according to their affordability.
List of documents required for housing loan
Applicants need to submit the following documents while applying for a housing loan. They are as follows:
- KYC documents (includes Aadhar card, driving licence, passport, voter ID card etc.)
- Employment ID
- Salary slips (last two months)
- Bank account statements for the last three months (for salaried individuals)
- Bank account statements for the last six months (for self-employed professionals)
- Income tax returns for last the 3 years (for self-employed professionals)
- Property related documents
Benefits of calculating EMI before availing of a home loan
The three benefits of computing EMI before going for a home loan are:
- Helps in deciding the borrowing amount
- Arrangements for repayment
- Helps in planning prepayments
However, prospective applicants must check whether they qualify the eligibility criteria set by their respective lenders.
What are the home loan eligibility criteria?
Home loan eligibility criteria vary from lender to lender. Further, the parameters depend on the employment of the borrowers. A few criteria among them are as follows:
For salaried individuals
- The borrower must be an Indian citizen.
- Applicants must have a minimum of 3 years of working experience.
- The age range must be between 23 and 62 years.
- CIBIL score has to be 685 or above
For self-employed individuals
- The borrower must be an Indian citizen.
- Must have a minimum of 5 years of working experience.
- The age range must be between 25 and 70 years.
- CIBIL score has to be 685 or above
Nevertheless, applicants should consider the 6 factors affecting their home loan eligibility.
To get a home loan, maintaining a top-notch credit score is not mandatory as it is a secured loan. However, retaining a healthy credit score can always be beneficial, despite the type of loan a borrower wants. This is because financial institutions offer reasonable interest rates when the credit score is high. An individual can check how credit score can determine their home loan EMIs.
For instance, many financial institutions provide pre-approved offers that escalate the lending process. They provide these offers on various financial products like home loans, loans against property etc. Applicants can check their pre-approved offers by entering details like their names and contact numbers.
Lastly, a borrower needs to be cautious before taking a housing loan and must read every necessary term and condition. If they find any difficulty calculating EMIs, they can take the help of a home loan interest calculator to overcome the situation.
