Home Loan EMI Calculator

How Is A Home Loan EMI Calculated?

How To Use A Home Loan EMI Calculator?

Using the home loan EMI calculator is simple.

• Go the home loan calculator
• Choose the desired loan amount and tenor and the applicable rate of interest

The calculator instantly provides you with the total payable, total interest, and the EMI value.

Factors That Affect Your Home Loan EMI

1. Principal- The principal refers to the amount that you borrow from the lender. It is directly proportional to your EMIs, i.e., the lower the principal, the lower will be your monthly instalments and vice versa.
2. Rate of interest- The rate of interest is the rate at which the lender offers you the loan. It is also directly proportional to the value of your home loan EMIs.
3. Tenor- The tenor is the time within which you repay your home loan. It is inversely proportional to your loan EMIs, i.e., the longer the tenor, the smaller your EMIs. But it is important to remember that a longer tenor translates to a high interest outgo.

As an example, the below table shows the EMI, the total payable interest, and the total payable amount for a loan of Rs. 1 lakh at an interest rate starting 6.75%* for different tenors.

The table below shows the home loan EMIs for various loan amount based on different tenors starting at an interest rate of 6.75%*.

How To Reduce Your Home Loan EMI?

Depending on the tenor and loan amount availed of, EMIs, or equated monthly instalments, on home loans can easily reserve a significant chunk of your monthly income, which can be a problem. Here are a few reliable and smart ways to reduce your home loan EMIs.

1. Make partial prepayments periodically

   An effective way to reduce your home loan EMI burden is to make partial prepayments every now and then. When you prepay your home loans, you pay off the outstanding principal amount.

2. Pay an extra EMI every year

   Every extra monthly instalment you pay reduces your total interest outgo and this results in savings down the line. Some lenders may have a minimum requirement on the prepayment amount and this may not be something you can afford. In such cases, you can opt to pay an extra instalment every year and reduce your monthly instalment amount steadily over the course of a few years.

3. Negotiate for better loan terms

   If you’ve maintained a good relationship with your lender, you may be able to negotiate for better loan terms. Whenever the loan reset comes along, try to secure a lower interest rate or restructure for a longer tenor to reduce your EMI outgo.

A home loan calculator helps you know the EMI amount that you will need to pay towards your Home Loan, helping you make an informed decision. The Bajaj Finserv home loan EMI calculator also functions as a home loan interest calculator, as it provides you the interest amount due on your home loan in addition to the overall EMI amount in just 3 simple steps.

EMI, or Equated Monthly Instalment, is the monthly repayment that a home loan borrower must make to repay the home loan within the specified loan tenor.

The table below illustrates the equated monthly instalments on several home loan amounts with different tenors considering the applicable rate of interest as 6.75%* onwards.

Calculating the EMI amount on your home loan is quite easy using a home loan calculator. Simply enter the loan amount you wish to take, the tenor, and the rate of interest in the respective fields.

A home loan EMI calculator helps you to decide whether you can afford the financial commitment of a home loan in the long term. If you want, you can increase or decrease your EMI amount depending on the amount of home loans you are taking and the time period for which you'll be paying the equated monthly instalments.

A home loan amortization schedule is a record of all the periodic payments on your home loan. Amortization is basically the procedure of repaying a loan through regular payments over a specified period of time. And an amortization schedule is the total tally of loan payments showing the amount of interest and principal contained in each payment until the loan is repaid in full.

Every EMI has principal and interest components. In the early period of the loan, the interest component is higher than the principal component for every EMI. In the later part of the home loan tenor, the principal component is higher than the interest portion. EMIs can be paid through ECS (Electronic Clearing System), which directly deducts monthly instalments from your account.

Part-prepayment brings down the principal amount, which in turn lowers the interest amount that you have to pay, ultimately resulting in lower EMI amounts.

You can claim tax deductions under Section 80C on the principal amount repaid through your EMIs annually up to Rs. 1.5 lakh. You can also claim a tax benefit on home loan under Section 24 on the interest component of the loan that you repay annually through your EMIs up to Rs. 2 lakhs.

Good planning always ensures stable finances. Calculating the housing loan EMI in advance gives a better understanding of the amount of money you would have to spend every month.

Hence, you can plan well and decide whether you are actually able to spare that much money or not.