Understanding EMI and the perks of using home loan EMI Calculator

Purchasing a home or refurbishing an existing one is one of the most important events in a person’s life. The high cost of buying or redecorating a house forces a person to borrow. If you too are planning to take up a home loan, you should first understand important terms associated with it. The first most important one is the EMI. Here is an easy guide to understanding EMI and how to ascertain your eligibility for a loan amount.

What is EMI?

EMI or Equated Monthly Installment is the monthly sum of money you are obliged to pay the bank for the loan you have taken. The bank decides the EMI amount based on the loan sum. When you take a loan, you get the whole sum at once. But when it is time for you to start making payment to clear off the debt, you do so by paying EMIs. This monthly sum gets misused from the principal amount.

There is a tenure in which you have to clear the debt. This is also decided by the bank. If you fail to pay the entire loan amount even after the tenure ends, then you will be charged for late payments.

How to find out whether you are eligible for a loan?

You are planning to take a sum of money from a bank or financial institution. But how do you know whether you are eligible for it? Your eligibility for a loan amount is determined on the basis of your savings, obligations, and salary. There is an easy way to do that- by using EMI Calculator. By using this number cruncher, you can find out whether the loan amount you want to take up is within your budget or no. It will save you from borrowing an amount that is beyond your financial capabilities and you will most probably have difficulty paying back. Don’t take a risk; use the home loan EMI Calculator before signing a loan deal with a financial aid provider.

How to use EMI Calculator?

EMI Calculator is as simple as using a normal computing device. It is available for free on many finance providers’ websites. Just go to one, click on the calculator section and select EMI calculators. Now start using. You are only required to put in the loan amount you want to take, the rate of interest on that loan amount, and tenure of the loan. See if it shows an affordable EMI sum. If not, then don’t worry. If not the exact loan amount, you can still take an amount which is budget friendly. Keep the principal and loan amount the same and change the interest rate. Or you could change the loan amount and keep the interest and tenure same. Keep changing it until the final figure is one which you can term as affordable.

Now that you have the knowledge, we hope you will take full advantage of it and enjoy a home loan without experiencing debt woes. Now, that’s what we call smart borrowing!

Hi, I am Anurag Mishra working with Home Finance company as Home Loan adviser owing good knowledge of Home loan, Home Loans, Home Loan Balance Transfer, Mortgage Loan, Property Loan and Personal Loan so on.