In recent years, individuals have become better acquainted with several online tools that have reduced the hassle of borrowing credits. Digitalisation has made these tools available to users’ fingertips, thus helping them to streamline loan application and ensure that they can maximise savings on repayments.
For instance, online home loan EMI calculators have facilitated users to compute EMIs before applying. The tool has also enabled individuals to choose the most convenient principal and tenor combination that can help them shoulder repayments without financial duress.
Potential and existing borrowers can now easily calculate home loan EMIs using the online calculator and, in turn, implement ways to ensure that they are paying reduced EMIs. Take a look at how this calculator can be utilised to plan loan repayment and reduce EMIs.
Reduce repayment amount
As the name suggests, an home loan EMI calculator helps to assess the monthly repayment amount against your home loan. This tool allows users to calculate EMIs using different variables pertaining to loan tenor and principal, until they arrive at a suitable repayment amount.
Following are the steps to using a home loan calculator –
- Visit the designated page for an EMI calculator on the website of your preferred lender.
- Adjust sliders for, or enter variables like principal amount, tenor and the interest rate applicable.
- Click on ‘Calculate’.
The calculator will instantly offer the EMI amount payable, alongside other details like total interest amount, amortisation schedule, etc.
If you find that the EMI amount is to be too high, and incompatible with your financial obligations, you can adjust the principal amount and repayment tenor, until you arrive at a suitable amount. This way, you can utilise the EMI calculator multiple times to reduce your EMI amount, before applying for a home loan.
Suppose you are planning to obtain Rs.25,00,000 as a home loan, and your preferred lender is providing 7.5% interest at this point.
Using the home loan interest calculator, you can get this result instantly and decide on the loan amount and tenor.
If you find that you cannot service Rs.34,710 each month, you can increase your tenor or reduce the principal amount to reduce the monthly EMI amount. Until it is compatible with your financial health.
Make sure to take note of these following factors before zeroing in on the most suitable EMI amount –
- Existing debts, if any
- Current financial obligations
- Future financial goals, since the home loan tenor can stretch up to 20 years
- Expected changes in income
Further, since housing finance companies set certain eligibility parameters, make sure to research properly and meet them to make your EMIs more flexible. As a matter of fact, aspects like your annual income and credit score can determine your home loan EMIs. It is also wise to compare different lenders and assess EMIs using a house loan calculator to get affordable interest rates.
Reduce the EMI burden
While for a new borrower, it is necessary to calculate home loan EMIs before availing a loan. The existing ones can follow some other measures to reduce their monthly liabilities. For instance –
Home loan balance transfer
Since some housing finance companies offer reduced interest rates, existing borrowers can easily refinance their home loan now with another lender offering lower rates.
Making a part-prepayment is one of the effective ways to reduce home loan tenor and EMI.
Keeping a good rapport with the lender and paying the dues on time. It help borrowers to negotiate a better repayment schedule. Lenders usually extend such perks to existing borrowers, thus allowing them to streamline the loan repayment.
Leading NBFCs also extend pre-approved offers that can make availing credits faster and more streamlined. These offers are available on various financial products, including home loans, loans against property, etc. Individuals simply need to submit their name and contact number to check their pre-approved offers.
Even though the abovementioned measures can save you from hefty EMIs. It is better to calculate home loan EMI accurately before taking such a huge responsibility.
This way, you get to plan your repayment better. Also manage other financial liabilities accordingly to ensure your EMIs are paid on time.