## How to Calculate EMIs Using a Home Loan CalculatorPosted by arwindsharma on October 25th, 2017 A Home Loan EMI is the monthly amount that you are required to pay towards a Home Loan. EMI or Equated Monthly Instalment comprises of a monthly loan amount plus the interest rate. For instance, if you have taken a Home Loan of INR 40 Lakh for a period of 20 years, i.e., 240 months and you are required to pay INR 20,000 per month, then you will have to pay the same amount for the next 20 years on a monthly basis. The amount that you pay on a monthly basis is known as the EMI.
A Home Loan Calculator is a user-friendly simple calculator which is available online. Majority of the financial institutions have the Home Loan calculator on their websites. The EMI calculator requires you to put in values, and it derives results almost instantly.
When it comes to calculating a Home Loan EMI, three variables need to be taken into consideration. These three variables include – loan amount, the Home Loan interest rate, tenor of the loan.
Let us consider three scenarios and based on that, let us understand how to use a Home Loan calculator:
Home Loan Amount: INR 20 Lakh Tenor: 240 months Rate of Interest: 10% When you put these values on the EMI calculator, you get an EMI of INR 19,300. Thus, if you decide to take a loan amount of INR 20 Lakh for a period of 20 years at 10% rate of interest, you will have to pay an EMI of INR 19,300. Similarly, if we change the variables, changes will occur in EMI.
Home Loan Amount: INR 20 Lakh Tenor: 240 months
When you put these values on the EMI calculator, you get an EMI of INR 17,995. Thus, if you decide to take a loan amount of INR 20 Lakh for a period of 20 years at 9% rate of interest, you will have to pay an EMI of INR 17,995. A change in interest rate will bring about considerable change in the EMI.
Home Loan Amount: INR 20 Lakh Tenor: 180 months Rate of Interest: 10% When you put these values on the EMI calculator, you get an EMI of INR 21, 492. Thus, if you decide to take a loan amount of INR 20 Lakh for a period of 15 years at 10% rate of interest, you will have to pay an EMI of INR 21, 492. Thus, a change in tenor will bring about a change in the EMI amount.
Tenor: 240 months Rate of Interest: 10% When you put these values on the EMI calculator, you get an EMI of INR 28, 951. Thus, if you decide to take a loan amount of INR 30 Lakh for a period of 15 years at 10% rate of interest, you will have to pay an EMI of INR 28, 951. Thus, a change in the Home Loan amount will bring about a massive change in the EMI. The scenarios above are the examples of how the EMI can be calculated using the Home Loan calculator. If you are looking forward to using a Home Loan EMI calculator, try Bajaj Finserv’s Home Loan calculator, it is quite user-friendly, and it derives instant results. Find out more about loans, here: |