The home loan calculator computes your EMI instantly based on your prospective loan amount, loan repayment tenure and rate of interest. This online home loan calculator also shows your overall interest payable, overall principal payable and the amortization schedule to assist you in understanding and planning out your home loan repayment in a better way after factoring in your repayment capacity.
Advantages of using a home loan EMI calculator
With the home loan EMI calculator, you simply can know about your monthly instalments before you apply for the home loan, which in turn assists you in determining the listed:
∙ How much can you borrow on through your home loan?
∙ Whether you must opt for the short term or long-term home loan?
∙ How much must you contribute towards the down payment of your home loan?
∙ How can you plan out your finances to ensure loan repayments on time?
What are the charges and fees applicable upon missing the home loan instalment?
If owing to a few reasons, you do not make payment of your home loan EMI, and you might require paying such home loan charges over your actual EMI payable:
∙ NACH/cheque/bounce charges: It is applicable when your home loan EMI fails to owe to inadequate amount or closure of your account for the EMI repayments. It generally is a fixed fee levied every time your automated EMI is deducted.
∙ Late payment fees: This fee may be a fixed amount or percentage of your unpaid amount.
∙ Penal interest fees: This is applicable to your unpaid EMI. This fee is generally a fixed percentage of the amount payable every month on your principal amount unpaid till the due is paid.
How can you lower your home loan EMI?
In case you are looking out for ways to reduce your home loan EMIs, consider the listed practices:
∙ Make your part prepayment whenever it is possible: Whenever you opt for the part prepayment option, you pay a part of your outstanding principal, which endows you with the choice to either lower your repayment tenure or EMI. Select lower EMI just when you are looking to make loan repayments in full. Home loans usually come with a lock-in of a nearly 1-year post which you can completely or partially prepay your loan amount. Also, unlike before, NBFCs and banks are not allowed to charge prepayment penalties or foreclosure fees on floating interest rate loans sanctioned to individuals for purposes besides business.
∙ Choose the home loan balance transfer option: You can opt for the outstanding loan and proceed with the transfer to lenders providing a lower rate of interest, longer repayment tenure or both. However, before opting for the transfer option, ensure to conduct a cost-benefit analysis to make sure your savings on interest outweigh your transfer expense. Also, ensure to use an online home loan calculator to know how much EMI can be reduced on the home loan rate.
Also, before availing of a home loan, ensure your CIBIL score for home loan must be 750 and above. Having a strong CIBIL score enhances your chances of home loan approval at a lower interest rate. The availability of a lower interest rate on a home loan automatically lowers your home loan EMI. Also, PSU lenders like SBI, PNB and others give credit scores the major importance while determining your approval chances. SBI home loan CIBIL must be 750 and above, and the same is for other home loan lenders.
Can your home loan EMI change during the loan repayment tenure?
Yes, even while your home loan EMI is generally a fixed proceed, it can considerably change during the repayment tenure but under specific circumstances, as listed below:
∙ When you opt for the step-down or step-up loan: If you opt for the flexible EMI in the case of a step-down or step-up property loan, there may be a change in your home loan EMI. In case you opt for a step-up loan, your home loan EMI will increase gradually over the repayment tenure. In case of a step-down loan, your EMI may fall as time passes.
∙ Partly processed loan: In the case of a partly processed loan, pre-EMIs will enhance with every disbursement.
∙ Loan prepayment: Prepayment affects your EMIs too. You either can select to lower your EMI for the same repayment tenure or lower your loan repayment tenure to keep your EMIs on a constant level. Latter is highly beneficial as you pay lesser interest. Take the help of a home loan calculator to know about the exact amount that you can save on your interest component.
∙ Rise and fall in the floating rate of interest: Whenever benchmark interest rates change, floating interest rates also change. If the floating rate rises, lenders normally will enhance your repayment tenure while keeping your home loan EMI the same. In case the new repayment tenure surpasses the maximum period allowed, then the bank might enhance your loan EMI.
FAQs (frequently asked questions)
How can you repay your home loan EMI?
To repay your home loan EMI, ensure to do the following:
∙ Issue SI (standard instructions) to your bank
∙ Submit the post-dated cheques to the lender
∙ Choose direct deductions of your monthly instalments by approaching your employer
Note that distinct EMI payment options mentioned above might or might not be available with all lenders.
Is GST applicable for home loan EMI?
No, GST is not applicable for home loan EMI. But it may be applicable to various other fees and charges like late payment fees, processing charges and prepayment fees.
How does making payment of home loan EMI assist in lowering your tax obligations?
To lower your loan burden and encourage more individuals to purchase and invest in assets, the Indian Government offers various home loan tax benefits. As per Section 80 C of the IT Act, home loan borrowers can claim income tax deductions of up to Rs 1.50 lakh on principal proceeds repaid via EMIs annually. According to Section 24b of the IT Act, you are allowed to claim income tax deductions of as high as Rs 2 lakh on payment of home loan interest.
