A lot goes into availing loan. From selecting the most suitable loan repayment tenure to choosing the right lender, borrowers must get these right and conduct thorough research before signing the papers with a lender they finalize. They must compare loan offers made by different lending institutions and choose the best loan offer for convenient repayment.
Two tools that can help in planning housing loan repayment are the Home Loan EMI calculator and the Home Loan Prepayment Calculator.
How a Home Loan EMI Calculator Helps Borrowers to Save Money
The calculator with its financial planning and loan repayment scheduling features can help save precious money while repaying the loan. You only need to input features such as loan amount, lending rate, and loan tenure to make necessary calculations.
- An online housing loan EMI calculator can determine the monthly payments towards the loan. It helps to know how much of a monthly liability the borrower can afford.
- If borrowers are already aware of the EMIs, they get to know in advance whether they will be able to easily pay off the EMI or not. If yes, they can proceed with the same loan size and term. Otherwise, adjust the figures.
Here is how an online housing loan EMI calculator allows users to save money:
Choose Suitable Tenure
- Tenure is one of the factors that impact loan EMIs. A longer loan tenure helps reduce the EMi amount. But ultimately, it increases the overall borrowing costs. Also, since a long-term loan increases the risk exposure for the lender, they may charge a higher interest rate than a shorter-term loan.
- Borrowers can try different combinations of loan amounts and tenures to get an affordable EMI amount and check the difference in interest costs for different home loan tenures.
Plan for Prepayments
Many home loan borrowers consider prepaying their loans partially or fully. It reduces the loan and interest outgo and thus helps to get rid of the debt sooner.
- Home loans are long-term commitments. There can be a scenario during a long tenure for borrowers to manage some extra funds. One may expect to receive significant returns from their investments or a lump sum amount from the workplace or any other source, like a second income source in one’s life.
- Using a home loan EMI calculator with prepayment features helps borrowers estimate monthly payments and plan prepayment of the loan. While repaying the loan, bonuses received in office can be used to make pre-payments, reducing the principal outstanding on the loan and also the subsequent interest on the remaining loan amount.
Calculate Savings Using Prepayment Calculator
Borrowers can calculate home loan EMIs and prepayment savings before finalising the loan amount, and tenure. Here are the steps to use a Home Loan Prepayment Calculator at the official website of renowned lending institution Fullerton Grihashakti:
- Enter the original home loan amount.
- Input the interest rate applicable.
- Provide original loan tenure.
- Enter the number of EMIs already paid.
- Enter the loan amount that the borrower wants to pay as prepayment.
A home loan calculator with prepayment will display the calculations within seconds. Borrowers should be clear about the prepayment charges as it does not take into account while making calculations using such tools.
Here is an illustration to understand savings on home loan prepayment. Suppose the original loan amount is Rs. 30 lakhs and the loan tenure is 30 years. The interest rate is 9%. The number of EMIs already paid is 24. The prepayment amount is Rs.5 lakhs.
The calculator will show the calculations as follows within a few seconds:
- Actual Loan Principal to be repaid – Rs.30 lakhs
- New Principal to be Repaid – Rs.24,57,086
- The actual number of EMIs remaining – 336
- The new number of EMIs remaining – 193
- Actual/interest to be paid – Rs.56,89,924
- New Interest to be paid – Rs.27,37,233
Taking a home loan online is one of the most important financial decisions and also a turning point in one’s life. Almost every lender provides home loan calculators on their websites for free. The best part of a home loan EMI calculator with prepayment is that borrowers can play with numbers without any interference or cost involved. When customers use any enquiry tool, they are asked for certain personal details. This may lead to spam calls or emails for loans that most individuals do not appreciate. This is not the case with home loan calculators.
Buy the home of your dreams or residential property as an informed borrower using home loan calculators and repay debt sooner as a smart borrower.
