Home Loan EMI Calculator: Do's & Don'ts

Posted by Bhavna Singhal on November 2nd, 2018

Home loan EMIs can be a financial burden to you if you don’t plan for them in advance. The EMIs are payable for a long-term and so you need to ensure that the EMIs are affordable. One of the ways of measuring the affordability of EMIs of home loans is through home loan calculators. Online Home Loan EMI Calculator are available which calculate and show you the EMI payable for your home loan. The calculator depends on three main inputs –

• The amount of loan you seek

• The repayment tenure

• Interest rate

The interest rate is decided by the lender and so you cannot control it. However, you can change the loan amount and the repayment tenure to arrive at the ideal EMI which would be affordable for you. So, home loan calculators not only help you know your EMIs before availing the loan but also help you increase or decrease the EMIs to make the most affordable.

There are some things to keep in mind when using home loan EMI calculators though. There are some do’s and don’ts of using home loan calculators which you should know and follow. Here they are –

Do’s

• Enter correct input values

The calculator shows you the EMI based on the values you enter into it. As such, you should be clear about the loan amount and the repayment tenure. Also, find the applicable interest rate to know the exact amount of EMI.

• Use calculators of online loan aggregators

Online loan aggregators are tied up with multiple lenders, both banks and Non-Banking Financial Companies (NBFCs). When you use their home loan calculators, you get to see the different EMIs charged by different lenders. You could then compare the different EMIs and choose a lender which charges the lowest EMI. This way you can get the cheapest home loan.

• Make a higher down payment for the loan

Home loans finance up to 90% of the property’s value. The rest is supposed to be paid by you through a down payment. The size of your down payment determines the amount of loan and the EMI payable. Try and pay a higher down payment so that the required loan amount is reduced. As the loan amount would be reduced, the EMI calculated would be low and affordable.

Don’ts

• Don’t choose an EMI which is unaffordable

The calculator lets you change the EMIs and adjust them according to your affordability. So, always use the calculator to your advantage. Adjust the EMIs by changing the loan amount and/or repayment tenure to make sure the EMIs calculated are the most affordable.

• Choose a very high tenure

Though the calculator lets you choose the tenure as per your affordability, you should remember that choosing a high tenure means paying home loan interest for a longer time. While your EMIs should be affordable, you should also keep the interest factor in your mind when deciding on the repayment tenure.

Additional Reading: How can you choose the best Home Loan

Home loan EMI calculators are a boon as they help you find the EMIs before you apply for the loan. Using the calculators you can find the most suitable EMIs and also choose the lender with the lowest interest rate. However, the above-mentioned do’s and don’ts should be kept in mind when using the calculator so that you get the most ideal EMI.