Online Tool For Home Loan EMI Calculation

The most important aspect of a home loan is its repayment, which is, the Equated Monthly Instalment (EMI). Simply put, EMI is the sum of the principal amount and interest on the principal divided by the loan tenure (in months). You will find home loan EMI calculators available on websites of almost all lenders and informational websites. This reduces the stress of doing complex calculations on your own.

How Do I Use the Home Loan EMI Calculator?

For the online calculator tool to compute your EMI, you need to either enter the following information or move the sliders in the tool to your left or right to adjust the following values:

• The amount of loan you want (principal)
• The rate of interest available to you (interest)
• Term of the loan (in years or months)
• The method of computation (optional)
• Annual reducing method: the principal amount and the rate of interest is made at the end of the year. (OR)
• Monthly reducing method: monthly reduction in principal as the EMI is paid monthly and the interest is calculated on the outstanding balance.

The annual reducing method is disadvantageous to the borrower and therefore the monthly reducing method is commonly used in EMI calculation.

What Results Does the Calculator Provide?

The home loan EMI calculator displays an easy to understand payment schedule and visual charts. A tabular breakdown of the two components of an EMI, principal and interest, is provided in the monthly payment schedule. It also indicates the loan balance after every payment. The colourful charts display what percentage of the total payment that you will make, consists of the principal and the interest. The longer the tenure of the loan, larger is the interest percentage.

Are There Tools Available to Calculate EMI for Home Loan Transfer?

If you want to take advantage of a lower interest rate by refinancing your existing home loan, there are online tools available to help you calculate your revised EMI and also calculate the amount of money you will save, should you go for a home loan transfer to another lender.

How do I calculate the EMI on the Refinanced Home Loan?

In order to calculate your revised EMI on balance transfer to another lender, the following information regarding you existing home loan and new loan needs to be entered into the tool:

Existing home loan information:

• Outstanding loan balance
• Existing rate of interest
• Current monthly payment (EMI)
• Pre- payment fees (if applicable

New loan information:

• Current interest rate offered
• Loan processing fees (if applicable)
• Loan tenure
• Current monthly income (required in some tools)

The home loan EMI calculator will show the revised EMI that you will have to pay if you go for the home loan transfer. Some tools will also provide you with the total amount you will save on your new loan repayment compared to the existing total repayment (over the tenure of the loan).

If you want to make smart financial decisions, there is no dearth of online tools at your disposal. Whether you are planning to buy a house or thinking of refinancing your house, you can get all the questions answered with easy to use tools available online.