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Crucial Role of an EMI Calculator in the Home Loan Application Process: Explained!
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A house is probably one of the biggest investments you make in a lifetime. It is a crucial financial decision involving lakhs of money. This is why you must carefully proceed after considering all the critical aspects and factors. Planning your home loan before applying can significantly help you in repaying it comfortably. There are many tools available online that can help you plan your home loan well before you apply for it. EMI calculator is one such tool. With the EMI calculator, you can determine the affordable loan amount and feasible tenure for you to ensure that you avail the right home loan.
Here is a brief guide on the EMI calculator. Continue reading.
What is an EMI calculator?
Home loan EMI calculator is an online tool that helps you calculate your affordability for a home loan. With this calculator, you can find your EMI value, total repayment amount and interest component of the loan by entering a few loan details. You can find the EMI calculator on the lenders or any aggregator’s website for free. An EMI calculator works on the following mathematical formula.
EMI = [P x R x (1+R)^N]/[(1+R)^N-1],
Where,
EMI - equated monthly installment
P - principal or the loan amount
R - the rate of interest for the loan (monthly)
N - tenure of the loan (monthly)
All you need to do is, input the relevant values and get the results.
Steps to use an EMI calculator
Benefits of Using an EMI calculator
An EMI calculator can help you determine your affordability and make the right financial choices. By using an EMI calculator before applying for a home loan, you can make a suitable budget that is feasible for you. Here are some benefits of the home loan EMI calculator you must know about.
With the calculator, you can get an affordable EMI and ensure that you can comfortably afford the loan amount. It can also help you in effective financial planning.
You can use a home loan calculator any number of times for free. It is accurate and leaves no room for errors.
You can alter the values of variables like loan amount and tenure to get an affordable EMI. You can use the calculator ‘n’ number of times anytime and anywhere.
An EMI calculator can help you determine your EMI before you apply for the loan. You can then plan your loan in a better manner. However, you must remember that it shows only indicative figures and the lender would tell you your exact EMI amount.
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