With a home loan, you can take the next step towards owning your dream home. Home loans give you a lump-sum advance of funds that you can use to buy any property or plot of land of your choice. You then need to repay this amount in fixed monthly installments called EMIs (Equated Monthly Instalments).
If you’re wondering exactly how much home loan you need to get and what your repayment will be, a home loan calculator is an answer to these questions. The calculator will help you understand your interest and EMI amount for a specific loan amount and tenure.
Advantages Of Using Automating A Home Loan Calculator
A home loan calculator makes it easy to compute the EMI and interest payments for your house loans based on different combinations of loan amount and tenure.
Following are some benefits of using the online calculator before applying for a home loan:
Plan Repayments
The loan calculator is an easy way to plan how you want to structure your loan so that your EMIs fall in a comfortable range and are not out of your monthly budget.
If your EMI for a certain loan amount, tenure, and interest rate combination are too high, you can change any of these factors to understand which combination of these three would give you the right installments.
Error-Free Calculations
All your loan calculations will be computerized, so you can enter as many loan amounts and tenures without fearing that a calculation will go wrong.
Doing the same calculations manually will take longer and might potentially lead to errors.
Fast Results
The home loan calculator will compute your variables and give you the resultant EMI amount within minutes.
By using the calculator, you don’t have to waste hours calculating your home loan interest and EMI.
Flexible
The online tool is flexible and lets you enter any combination of variables: the principal loan amount, rate of interest, and tenure.
Once you’re satisfied with the results, you can choose the right tenure for your home loan based on your calculations and get the desired EMI amount.
Easy Comparision
House loans come in different categories and schemes, and it’s up to you to compare all these options so that you can get the best home loan offer.
With the online calculator, you can compare different loan schemes easily by entering the basic scheme details to compute the interest and EMI amount.
How To Use Home Loan Calculator
The online calculator uses a simple formula with three factors to compute your home loan interest and installments:
[P x R x (1+R) ^N]/[(1+R) ^N-1],
- P means the principal loan amount, which is the amount of home loan you need
- R is the rate of interest, is the amount of interest on your loan
- and N stands for the number of years or the term for which you avail of the loan
When you want to calculate the interest on your loan, enter the loan amount you need, then the tenure for which you want the loan, and finally enter your expected interest rate.
This calculation will give you an idea of your monthly outflow toward the home loan repayment.
Documents Required For Home Loan
Anyone can apply for a house loan, whether you’re salaried or self-employed. You need to submit certain documents that will helo lenders verify your credibility and guarantee that you can repay the loan you are borrowing.
Along with the loan application form, you need the following documents for a home loan:
- Proof of age, like an Aadhar card
- Identity proof, such as Aadhar or PAN card
- Residence proof, like utility bills
- Education qualifications, like school or degree certificates
- Proof of income, like six months’ salary slips, Form 16, and recent bank statement
- Other documents, like the title deed and registration contract
Conclusion
Applying for a home loan becomes smoother and easier if you have all the calculations done beforehand and know exactly how much loan you need to avail of and for how long. You can take out a home loan to buy a home, construct a house, or even make repairs and renovations to your existing house. You can easily determine the cost of any of these loan types simply by using the calculator.
