Since defaulting on home loan EMIs can negatively affect a borrower’s credit score, he/she must calculate the monthly installments before availing this credit. The calculation of the monthly installments is based on three factors, i.e. principal amount, interest rate, and tenor.
Aspiring homebuyers can use the following mathematical formula, which is traditionally used to compute home loan EMIs.
EMI = [P x r x (1 + r) n] / [(1 + r) n - 1]
Here P stands for principal, r refers to the rate of interest and n indicates the number of EMIs. Borrowers can use a home loan interest rate calculator available online for this same purpose. These calculators are also based on this formula.
Benefits of EMI Calculators
- Housing loan EMI calculators reduce the probability of errors in EMI computation. With its help, aspiring homeowners can quickly figure out the exact monthly installment against their desired loan amount.
- Additionally, it aids borrowers to gain insight into their debt. With its assistance, they can make an estimation of their total debt as well as their monthly obligations.
- These calculators allow individuals to adjust primary factors of a home loan, i.e. principal, tenor and interest rate to arrive at the most affordable option.
- Lastly, home loan EMI calculators also help borrowers to compare the offers from multiple lenders, and make an informed decision. These calculators are majorly useful when it's time to pay home loan EMI using Bajaj Finserv online payment.
Home loan interest rate calculators are available on the website of almost every lender. Moreover, taking assistance of this calculator does not require any charges.
