A home is a personal asset that serves as a foundation for growth for you and your family. It fosters familial bonds, cultivates life-long memories and provides security, both practically and figuratively. These are some of the reasons that contribute to the importance of owning a home. However, with ever-growing property prices, putting down a lump sum amount can be difficult and so you may need to look for a way to make payments in installments. A home loan is one of the best options you can use to buy, build or renovate your home.
These loans offer substantial funding, allows you to claim tax exemptions, and can be repaid through long tenors. Just as you would with any other loan, you’re required to carry out a few tasks before you make an application. In this case, it would include checking the lender’s home loan eligibility criteria, interest rates, and processing fees. Additionally, to get an even clearer picture of what you’re getting into, you should use a home loan EMI calculator online for additional insights into this long-term financial obligation.
Listed below are the top reasons why an EMI calculator is important for home loan borrowers:
Helps You Gauge the Affordability of the Loan
When deciding whether or not you can afford a home loan, you need to know what your EMIs are going to be. You can compute this easily by using an EMI calculator. Upon knowing the results, evaluate your finances to see if the EMI fits in your monthly budget. At this stage, compute your debt-to-income ratio and ensure to keep that value below 25%.
Anything higher and you’ll end up compromising in the other financial spheres, which can be detrimental to your wealth. For example, if you’re spending 50% of your income in debt payments and the rest goes into your monthly spends then obviously you will not have funds for an emergency or any savings. This means that if you ever need to fall back on your finances for whatever reason, you will have to avail of more credit to get by. Keeping this fact in mind, allow your new home loan EMIs to make way to your repayment schedule only when your finances permit it.
Allows You to Compare Loan Offers Accurately
Especially great use of the EMI calculator is to use it to compare the various loan offers. As lenders will offer you a different interest rate based on their evaluation of your financial profile, use the calculator to settle on the best offer. In order to successfully carry out a comparison, you must alter the parameters of the loan basis lender terms and see the EMI results. Apart from the interest rates, check the additional benefits you can avail coupled with the sanction. This way, your repayment will be a lot more affordable.
Enables You to Choose the Right Emis and Plan Your Repayment Beforehand
The main purpose of an EMI calculator is to help you choose the right EMIs. You can achieve this by changing the values that affect the EMI result on the calculator. Tenor and loan amounts are generally the two variables that you have some control over and you should manipulate these until you find the perfect fit for your finances. Tailoring the EMIs to match your affordability is also useful when it comes to planning your repayment schedule. It can help you formulate a budget and even lead you to look for lucrative and efficient uses for your money.
Using an EMI calculator can not only get you the most suitable loan in the market but can also help you save a significant sum if used wisely. This is especially true when you use it to compare various home loan offers in India.
Here you can get up to Rs.5 crore as a sanction, which you can repay through a flexible tenor of up to 20 years. In addition to the home loan, you also get access to customized insurance schemes to protect your family from the burden of repayment. This loan can also be used to refinance an existing home loan with minimal documentation so that you can take advantage of attractive home loan interest rates.