Most individuals dream of owning their own house someday. It is a significant achievement and is considered to be a sign of financial stability. Buying a house is no easy feat though; real estate prices can get quite expensive and affording a house can be difficult if you are solely relying on personal savings. What most homebuyers do is apply for home loans to get the financial assistance required. Now, while a home loan is a great solution to make the property purchase happen, there is a lot that one needs to think about.
To start with, one needs to be sure of being able to successfully repay the home loan. There have been cases where borrowers have faced struggles with the repayment of their home loans because of not calculating their home loan EMI payments accurately. But this problem can easily be avoided by using a home loan EMI calculator.
Using a home loan EMI calculator is really simple. All it needs is information related to three of the following fields:
- Loan amount
This refers to the principal amount that you are looking to apply for. Do note that the lender will take into account factors like your monthly income, credit score, age, financial documents, etc. before approving your application. In order to qualify for a high loan amount, you need to be drawing a high monthly income and have a good CIBIL score.
- Repayment tenure
This tenure refers to the term during which you will have to repay the home loan in monthly instalments. Now, the repayment tenure you choose will influence the monthly instalments of the home loan. Financial institutions usually offer up to 20 years to repay the loan. You can choose whether to go for this tenure or choose a shorter term to repay the loan. Most borrowers prefer to go for long tenures, as the monthly instalments are easier to pay. However, choosing a short repayment tenure, even if it means paying higher monthly instalments, can be beneficial. This is because by cutting down the number of EMI payments, you end up saving money on the interest payment, which gets added with each instalment. Try out different tenures to see what is most suitable for your budget.
- Interest rate
Different lenders will have different charges when it comes to the interest rate of your home loan. Before you apply for home loan, make sure to find a lender that offers a competitive home loan interest rate. By using the home loan EMI calculator, you can find out whether the interest rate offered by the lender is affordable.
Once you find a suitable loan plan based on the results of the home loan EMI calculator, go ahead and apply for the loan. Before doing so, it is advisable to first make use of a home loan eligibility calculator. This calculator can help in understanding the loan amount that you are eligible for. This calculator can help in reducing the chances of your home loan application getting rejected.