Benefits of Mortgage Loan EMI Calculator

Benefits of Mortgage Loan EMI Calculator

If you plan to buy a house, you might wonder how to finance it. One of the most common ways to do so is by taking a mortgage loan. It is a type of borrowing where you borrow money from a lender and use your property as collateral. You then repay the mortgage in monthly instalments and interest over a fixed period.

But how do you know how much you can afford to borrow, how much you have to pay every month, and how long it will take to pay off your loan? That is where an EMI calculator comes in handy. An EMI calculator is a digital device that helps you calculate your Equated Monthly Instalment (EMI), which is the amount you must pay monthly to your lender. It also shows you other important details, such as the interest rate, the total interest paid, the principal amount, and the loan tenure.

Reason 1: Plan your budget

Planning your budget is one of the first steps to buying a house. You need to know how much money you have, how much you can borrow, and how much you can spend on your house. A mortgage loan EMI calculator can help you do that by showing you how much EMI you have to pay for a given loan amount, interest rate, and loan tenure. You can also adjust these parameters to see how your EMI changes.

Reason 2: Compare different loan options

Another benefit of using a home loan eligibility calculator is that it can help you compare loan options from various lenders. Lenders may offer different interest rates, processing charges, prepayment costs, and other terms and conditions for the same loan amount and tenure. An EMI calculator can help you compare these factors and choose the best loan option for your needs and preferences.

Reason 3: Save money on interest

One of the biggest mortgage loan expenses is the interest you have to pay to the lender. The interest rate, the loan amount, and tenure determine how much interest you pay over the loan period. An EMI calculator can benefit you by saving money on interest by choosing the optimal loan tenure and prepayment options.

For example, suppose you take a loan amount of Rs 40 lakhs, with an interest rate of 8% and a loan term of 20 years. Your EMI will be Rs 33,458, and your total interest will be Rs 40.3 lakhs. If you reduce your loan tenure to 15 years, your EMI will increase to Rs 38,430, but your total interest will decrease to Rs 29.2 lakhs. If you further reduce your loan tenure to 10 years, your EMI will increase to Rs 48,251, but your total interest will decrease to Rs 17.9 lakhs.

Reason 4: Negotiate better terms with lenders

Another advantage of using an EMI calculator is that it can help you negotiate better terms with lenders by showing your repayment capacity and creditworthiness. Lenders are more inclined to allow you lower interest rates, flexible repayment options, and lower processing fees if you can demonstrate that you can repay the loan on time and without any defaults.

An EMI calculator can help you do that by showing you how much EMI you can comfortably pay based on your income, expenses, savings, and financial goals. You can also show the lender your credit score, which is a degree of your credit history and behaviour. 

Conclusion

A Mortgage Loan EMI Calculator helps you plan your budget, compare loan options, save interest, and negotiate better terms for your home loan. It gives you the knowledge and tools to manage your mortgage financing with confidence and financial prudence.