Why Home Loan Borrowers Must Use EMI Calculators

Why Home Loan Borrowers Must Use EMI Calculators

Why Home Loan Borrowers Must Use EMI Calculators
(Dreamstime)

When an individual applies for a loan, they have to agree to a pre-determined rate at which interest must be paid. The borrower will have to pay the principal and the interest amount over a period fixed in the loan document. Home loan applicants can calculate beforehand the financial responsibilities they are subscribing to with the help of EMI (equated monthly installment) calculators.

How does it help?

The EMI calculator can be the key to finding the ideal scheme for you. An individual looking for a housing finance loan would prefer a reasonable rate over a 15-20 year period. To this effect, there are several features that the EMI calculator can provide in predicting which EMI scheme can be beneficial, among other things:

*It helps in planning and arranging finances ahead of schedule. One can estimate how much interest will be paid by them every month and over the period of entire home-loan tenure.

*As a thumb rule, one’s monthly outgo in the form of home loan EMI should not go beyond 40-50 per cent of the total income. Keeping this in mind, you can find out the right amount of loan you should apply for.

*With the help of EMI calculators, you can easily gauge how a minor difference of a few basis points can result in huge outflow of your funds over a period of 15-20 years. So, it helps in pushing you towards the lowest-possible interest rates and the right period of loan repayment.

*Using the EMI calculator is child’s play. It is as easy as booking tickets to the movies if you think about it. Once you enter the tentative amount, the applicable interest rate you are comfortable with, and the loan tenure, the calculator generates the EMI you will be accountable for.

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