The dream of being a proud homeowner is a cherished one and to make this aspiration a reality, many seek the help of a home loan. Buying a home is an investment that takes great financial commitment and foresight, both of which will help you stay on track as you repay your home loan.

The responsibility of buying a home doesn’t end after the initial purchase. Borrowers must diligently follow their EMI schedule and meet other loan-related costs to steer clear of defaulting and jeopardizing their valued property. Therefore, we emphasize the importance of having a clear repayment plan at the time of borrowing.

Having a repayment path laid out before you helps compartmentalize your future expenses and obligations without compromising your savings and family’s needs. This can be attained by knowing how to calculate your home loan EMI which, gives you a clear picture of how long it will take for you to close your loan. You can either do this calculation manually or resort to using an  home loan EMI calculator  that lets you select the interest rate and tenor of your choice to give you different repayment scenarios.

Still unclear on how to calculate your home loan EMI? Read on to know more.

What is Home Loan EMI? 

The Equated Monthly Instalment, or EMI, refers to the amount of money you pay monthly to service your home loan. Your lender sets the EMI based on factors like the principal loan amount, home loan interest rate, and loan tenor. Each EMI comprises a principal component, as well as an interest component, which change over the course your tenor. Short-term home loans translate to quicker repayment but with high EMIs. On the other hand, long-term home loans offer comfortable repayment on a monthly basis.

How to Calculate Home Loan EMI 

The formula to calculate the EMI on a home loan is: 

EMI= [P × R × (1 + R) ^ N]/ [(1 + R) ^ N-1]

Where P = Loan amount or principal

R = Interest rate per month [if the interest rate per annum is 11%, then the rate of interest will be 11/ (12 x 100)]

N = Number of monthly instalments

However, you also have the option of calculating your EMI in a simpler fashion, using online calculators such as the Bajaj Housing Finance Home Loan EMI Calculator. This is a simple online tool that computes your EMIs based on the basic information you input – the loan amount you require, your desired loan tenor, and  home loan interest rate . Note that most leading lenders offer a flexible loan tenor that spans up to 30 years.

Advantages of Using a Home Loan EMI Calculator

There are several advantages of using a Home Loan EMI Calculator. Some of them include:

1. Easy to Use

The Home Loan EMI Calculator makes calculating the EMI payable on your home loan easy and accurate. As mentioned above, the user only needs to key in the important fields such as the principal amount, loan tenor, and interest rate, and the calculator will draw up the EMI amount based on the given information. Using the calculator also eliminates the margin of human error and gives you clear numbers to base your repayment plan on.

2. Comprehensive Details of Your Home Loan EMI

The Home Loan EMI Calculator also offers details key to your home loan EMI. It lets you see what percentage of the sum you are liable to pay is the accumulated interest and how much is the principal loan amount.

3. Match with Better Lenders

Every prospective borrower will have several lenders in mind, and by already knowing your repayment capacity, you can choose amongst these lenders, make an informed decision, and select the one whose rates and offerings are the most competitive and beneficial to you.

Calculate Home Loan EMI the Easy Way Today 

Using the Home Loan EMI Calculator helps you sift through your choices and select the right home loan deal. More importantly, knowing your EMI helps you prepare a definite repayment schedule that you can stick to without wavering.

Once you have all the necessary information, go ahead, and apply with any of the leading lenders in the market. One such lender is Bajaj Housing Finance Limited. The HFC offers home loans starting as low as 6.70%* p.a. for salaried and professional applicants. Visit their website today to  apply online .