Indian lenders offer several online tools which you can use to check your home loan eligibility and calculate the probability of loan approval.
A home or house loan calculator is one such tool that makes home loan EMI calculation simpler. You can use it to calculate the loan amount you are eligible for and the EMIs you need to pay every month.
The following are the benefits of the house loan calculator:
- It helps you to create a budget for repayment. Generally, lenders approve up to 50% of your monthly net disposable income as the loan amount. However, you may decrease it to keep funds available for other purposes.
- You may increase your savings. To find out the amount you can save, you need to change the loan term within the house loan calculator and see the EMIs increase or decrease.
- It helps you to select the right loan term. You may increase the loan term to decrease your home loan EMI. Conversely, if you decrease the loan term, your EMIs will increase; but, the interest rate will come down.
- It gives you an idea of the amortization schedule. The amortization schedule contains a detailed calculation of the home loan EMI, which is divided into principal and interest.
- By paying your home loan EMIs regularly, you can see an enhancement in your credit score.
Conclusion
The process of using a home loan calculator is reasonably straightforward. You need to enter details such as the net monthly income, interest rate, loan term, and other EMIs to get a quote and know your home loan EMIs. A home loan needs your long-term commitment, and by knowing the amount you have to keep aside every month, you can service your loan efficiently.
