Home loan calculator: features and how to use it? - times of india

NEW DELHI: A home loan calculator helps you in calculating the loan installments i.e. EMIs (equated monthly installments) that you need to pay to the bank till the loan amount is completely

paid. The EMI that you receive after calculation depends upon your home loan amount, rate of interest and tenure of the loan. It is amongst the best financing planning tools for a person who

wishes to purchase a home. Features of a home loan calculator Comparative analysis: With the help of a home loan calculator, you can compare the loan schemes offered by different banks and

calculate how much money can be saved by opting for a particular bank. Look out for options: To find out the total mortgage cost, the loan applicant can enter different loan amounts, tenures

and rates of interest in the online calculator to assess various payment options. Repayment scenarios: home loan calculators can be used by an applicant to get the results on the basis of

their repayment schedules by entering the details such as monthly payments, interest rates, and loan tenure. Customized calculation: The applicant can get customized results through a home

loan calculator by entering the type of interest rate, amortization period and loan amount. Handy & quick tool: home loan calculators are very easy and convenient to use as these can

make calculations in less time and help an applicant to get an overview of loan options that are available in the market. Helps in understanding the product better: Since the home loan

calculators are easy to use therefore these help in better understanding of products and services instead of having a rich description in a text format. Retaining customer satisfaction:

Various banks and financial institutions use home loan calculators on their websites to attract more customers and attain their satisfaction. How to use a home loan calculator? A home loan

calculator is used for calculating the Equated Monthly Installments (EMI) of an applicant by using the data given below: * LOAN AMOUNT: It should be between Rs 50,000 and Rs 1 crore * TENURE

OF THE LOAN: It is between 1 year and 30 years * RATE OF INTEREST: It should be between 1 percent and 50 percent (it may vary from one bank to another) Formula used to calculate the home

loan EMI is: EMI = [P x R x (1+R) ^n] / [(1+R)^ n-1], where P = Principal loan amount R = Rate of interest N = Number of monthly installments In the results, you would see: * THE EMI: It is

the amount that needs to be paid every month until the loan is paid completely. * THE BREAK-UP: The rate of interest is displayed in portions in each month's EMI. And, the principal

amount is repaid each month. * THE AMORTIZATION SCHEDULE: The amortization schedule displays the break up of loan payments that consists of the repaid principal amount and the interest paid

out of the EMI till the tenure of the loan gets over. Here are some of the most common questions asked about home loan calculator: * WHAT IS A HOME LOAN CALCULATOR? It is a financial

planning tool that helps you in calculating the loan installments i.e. EMIs (equated monthly installments) that you need to pay to the bank till the loan amount is completely paid. * WHAT IS

AMORTIZATION? Amortisation is the way of repaying a loan amount in a specific time period. * CAN I APPLY FOR A JOINT PROPERTY LOAN? Yes, you can. And, it depends on the nature of your

relationship with the applicant. * ARE THE RESULTS OF THE HOME LOAN CALCULATOR ACCURATE? The results of a home loan calculator are based on the inputs you give. Also, the results may vary

owing to the difference in interest rates.