Home loan EMI calculator

Are you thinking about constructing or buying your Dream Home with a loan? And looking to know about the EMI for your home loan?

Then here is the home loan EMI calculator to find the amount of money you need to pay every month for your home loan.

How to use a home loan EMI calculator?

We need to know the following to use the home loan emi calculator.

1. How much loan amount you need.
2. At what rate of interest home loan will be availed to you.
3. How many years you would take to repay the home loan.

Then enter all the three in the above Home Loan EMI Calculator then you will find the EMI for your home loan.

Also check the House Construction Budget Calculator.

What is EMI?

EMI stands for Equated Monthly Installment. 

EMI is the money you pay every month to repay your home loan. It includes both the principal and the interest of the loan amount. 

The principal is the amount you borrowed, and the interest is the extra money the bank charges for lending you the money.

How is the EMI of a housing loan calculated?

The formula to calculate the EMI of housing loan is

EMI = P x R x (1+R)^N / [(1+R)^N-1]

P – Principal amount (the loan amount)

R – Monthly interest rate (annual rate divided by 12)

N – Loan tenure (number of months to repay the loan)

For example lets see how house loan emi is calculated:

Let me consider that I take a home loan of 60 Lakhs with 8.4% interest rate for 30 years.

Then

P – 60,00,000

R – 0.007(8.4% divided by 12)

N – 360(30 years)

EMI = 6000000 x 0.007 x (1+0.007)^360 / [(1+0.007)^360-1] = 45710

Therefore the home loan EMI for 60 lakhs with 8.4% annual interest for 30 years is 45,710 rupees.

To know more about principal and interest you pay every month in detail. Enter the details and click the show more details in the above home loan emi calculator.

How to apply for a home loan?

First look for different banks and compare their loan offers. Try to compare at least 4 to 5 banks interest rates for your home loan.

Then provide your personal and financial details to the bank you choose to apply for the home loan.

Hand over the necessary documents to the bank so that they could start the home loan process asap.

Then the bank will check your details and approve the loan.Once approved, the bank will give you the loan amount.

Common Mistakes to Avoid

Always compare different banks to find the best offer. Don’t go with the first one you find. Or the one you are comfortable with. 

Try to find the bank that offers the low interest rate for your cibil score.

Borrow only what you can comfortably repay. Try to calculate the salary with your emi and monthly expenses. It should not take 100% of your monthly salary. 

The longer the tenure the higher the interest you pay. So try to choose tenure with the EMI you could pay every month.

Look out for processing fees, prepayment penalties, and other hidden charges. These can add up and increase your loan cost.

Tips to Manage and Reduce Home Loan EMI

If you get some extra money, like a bonus, use it to pay off part of your home loan early. 

If you could pay every year more on principal amount, this can help you to reduce your EMI.

Try to pay partial on your principal amount. Check with the bank whether you could reduce the home loan tenure. It may help to reduce the interest.

Choose a longer home loan tenure to reduce your monthly EMI. And make a prepayment on the principal amount to reduce the interest amount.

Sometimes after years you may find a bank with a lower interest rate, you can switch your home loan to that bank.

Pro Tip: Sometimes, small lifestyle changes can save money, which you can use to pay off your home loan faster.

Government Schemes and Benefits

Pradhan Mantri Awas Yojana (PMAY)

This is a government scheme to help people buy homes. If you qualify, you can get benefits like lower interest rates. Check if you are eligible and apply for it.

State Government Schemes

Tamil Nadu also has its own schemes to help people buy homes. The Tamil Nadu Housing Board (TNHB) offers special benefits for first-time homebuyers.

Tax Benefits on Home Loan EMI

You can save on taxes if you have a home loan. Sections 80C, 24(b), and 80EE of the Income Tax Act allow you to claim deductions on your EMI payments. This reduces your overall tax burden.

Final Verdict

Remember, the EMI includes the principal amount, interest rate, and home loan tenure. 

Compare all banks, check for processing fees and other hidden charges, and use home loan EMI calculators to plan better tenure.

Don’t hesitate to look at multiple banks and make sure you understand all the terms before taking a home loan. Also get advice from your financial advisor.

Frequently Asked Questions (FAQs)

Q1: What is the best loan tenure for a home loan? 

As I said earlier, it totally depends on your monthly income and how much you can afford to pay each month apart from your monthly expenses.

Q2: How does a change in interest rate affect EMI? 

Yes, if the interest changes EMI is affected. As interest rates go up, your EMI will also go up, and vice versa.

Q3: Can EMI be reduced during the loan tenure? 

Yes, you can sometimes reduce your EMI by making prepayments.

Q4: What happens if I miss an EMI payment? 

Missing payments can affect your credit score and might lead to penalties. So be careful, strictly don’t miss a payment.

Q5: Can I switch my home loan to another bank?

Yes, you can transfer your home loan to another bank offering a lower interest rate. This helps you save on interest costs.

Q6: Can I take a joint home loan?

Yes, you can take a joint home loan with a co-applicant like your spouse or parent. This can increase your loan eligibility and also offer tax benefits to both applicants.

Q7: Are there any penalties for prepaying my home loan?

Some banks may charge a prepayment penalty if you repay your loan before the end of the tenure. Check with your bank for their specific terms and conditions.