When getting a mortgage loan, it’s essential to estimate your monthly payments/EMIs accurately. One of the most efficient ways to do this is by using an EMI calculator. This tool considers your loan amount, interest rate, and tenure to calculate the Equated Monthly Instalment or EMI.
Using this tool, you can understand how much you’ll pay monthly. It can also help you decide on the right loan amount and tenure that works for your financial requirement and situation. Using an EMI calculator can simplify the process of getting a loan and help you plan your finances more effectively /zwzhanbf-ym.
What is a Mortgage Loan EMI?
A loan against property is a secured loan where you pledge an asset, such as a residential or commercial property. The loan amount you receive is based on the property value you commit, and your EMIs comprise both the principal and interest components.
The loan payments are based on amortisation, with the interest component making up a more significant portion of the EMIs in the early stages of the loan. However, as you continue making payments, the interest portion decreases, and the principal component increases. Despite this, the total value of the EMI remains constant throughout the loan tenure.
Note: The pledged asset remains with the lender until you repay the loan amount. Additonally, compared to unsecured loans like personal loans, loan against property interest rates are typically lower.
What is a Mortgage EMI calculator?
EMI is a crucial aspect of loan repayment that involves the borrower making monthly payments towards the loan amount and interest accrued. Using an online calculator can be helpful in managing the loan as well as your other financial obligations. With just a few clicks, you can enter the loan variables, such as the principal amount, interest rate, and tenure, and get the expected EMI instantly.
EMI payments initially contribute more towards the interest component of the loan. In contrast, in the later stages of the loan tenure, the central part of the EMI goes towards the repayment of the loan principal. Though the EMI amount is generally fixed, it can vary in the case of floating interest rate loans and prepayments. Calculating EMIs using the formula is complex, and an EMI calculator is a hassle-free way to determine it.
What is the Formula to Calculate EMI?
The formula is:
EMI = [P x R x (1+R)^N]/[(1+R)^ (N-1)].
Here P stands for the principal amount, which is the money borrowed. The rate of interest (R) is the interest rate charged on the loan amount, which is calculated monthly. The tenure of repayment (N) is the monthly instalments you will pay to repay the loan.
EMI plays an essential role in loan repayment as it allows borrowers to pay back their home loans in easy instalments, reducing financial pressure. The payments consist of principal and interest components and can be calculated easily using an EMI calculator.
The housing loan EMI calculator is a valuable tool that can help borrowers determine their monthly loan EMI payouts quickly and easily. With the option to compare EMIs for different loans, borrowers can make informed decisions and choose the loan that best fits their financial situation.