Mortgage interest rates are at their best thanks to the Indian Reserve Bank’s decision to keep key rates unchanged. This has increased the demand for this credit instrument. As documented in a recent report, the demand for home loans increased by 26% in the first half of 2021.
Housing loans being a significant financial commitment, it is ideal to have a precise idea of ââtheir repayment before applying. In this regard, one should use a home loan EMI calculator to make an informed decision.
How to use a home loan EMI calculator?
Here is a step by step guide on how to calculate EMI using this online device –
Step 1: Visit the official website of a lender and open an EMI calculator
2nd step: Enter the relevant details such as the principal amount, home loan interest rate, and the duration of the loan
Step 3: Get EMI amount and total interest payable instantly
In addition, one can use the slider option or enter different values ââto find a suitable loan offer. Using these calculators is not a problem and they offer many advantages over manual calculation and help to make informed decisions.
Top 5 Benefits of Using a Home Loan Calculator
Here are some notable benefits of using an online calculator –
- Fast and precise results
Using the ‘EMI = [P x R x (1+R) ^N] / [(1+R) ^N-1]’formula one makes it easy to find the monthly payments for a mortgage. However, manual calculations always run the risk of errors, leading to the wrong decision. Hence, these online devices guarantee accuracy which further helps in applying for credit.
In addition, manual calculations are long and time consuming. While these devices present the required information instantly, saving valuable time.
- Easy to use
EMI calculators usually come with a user-friendly interface which further enhances the ease of use. These devices are not difficult to use and the application is straightforward. To achieve the desired result, just enter the rates, principal and term of home loans in their respective fields.
- Ease of customization
One of the most notable benefits of using a home loan interest calculator is the ability to customize. With this device, borrowers can enter as many different values ââas they want to find a suitable loan repayment schedule. Moreover, they can compare several loan offers using it. Thus, help them find a loan offer adapted to their needs and their repayment.
- Better financial planning with amortization schedule
In addition to all of its advantages mentioned above, an online calculator also provides access to the loan amortization schedule. This chart or table includes a detailed breakdown of the EMI payment for a home loan. It shows how the installments progress through the content and how the interest and principal components change.
Having access to this calendar can help potential borrowers repay their loan. They can now plan their payments accordingly and avoid any complications.
- Does not require any fees
Last but not least, online calculators like these do not incur any additional usage fees. They are available for free on the website of the lender and one can use them as many times as one wishes.
In addition to offering access to a home loan IME calculator, reputable lenders also offer pre-approved deals to their existing customers. These offers reduce the time required for a home loan application by streamlining the process. Prospective borrowers can verify their pre-approved offers by submitting their essential contact details.
In addition to knowing how to use a mortgage calculator and its benefits, potential borrowers should also understand other aspects of this financial product.
Eligibility criteria for housing loans
The eligibility parameters for a home loan include –
- Credit score: 750 or more
- Age: 23 to 68 years for salaried candidates
25 to 70 years for independent candidates
- Type of employment: Employee and self-employed
- Professional experience: At least 3 years for employees, and at least 5 years of seniority for the self-employed
- Monthly income: Depends on the city of residence and the type of job of the applicant
Apart from this, a financier may have additional eligibility requirements that they must meet on source credit for the purchase of a home.
Documents needed to apply for a mortgage
Here is a list of the documents that one must present for a housing loan –
- KYC Papers
- Proof of income (form 16, salary slip, ITR documents, income statement, etc.)
- Documents proving the seniority of the company
- Ownership documents required
In addition to knowing these essential elements of housing credit, future borrowers should also learn about the application process for this credit instrument. Nowadays, with online services, it is now easy to apply for a loan through a lender’s website or mobile application.
However, major financiers have pre-approved offers that streamline this process and save time. These offers are available on a multitude of financial products, including home loans, home loans, etc. Borrowers can enter their personal details to learn more about this.
A home loan EMI calculator helps potential borrowers make sound financial decisions. They have access to much more information outside of NDEs, which is helpful in this regard.