Home Loan EMI Calculator

Home loan EMI calculator is a financial planning tool that assists you to make an informed decision by helping you to estimate payable EMI towards your home loan, before applying.

As the name itself suggests, Equated Monthly Instalments (EMI) are due every month, and work toward reducing your home loan burden, till competition, typically at the end of your repayment tenor. You are obligated to pay your housing loan EMI on a fixed date every month, that is set in unison with your lender. Missing an EMI payment could lead to penal charges, or even legal action, if it is consecutive.

Understanding what you may pay as your home loan EMI once your repayment tenor begins is extremely important, especially for the sake of your financial health. Planning in advance can only bode well for you and help you stay on track with your house loan EMIs. On that note, aspiring home loan borrowers must familiarise themselves with the types of home loan EMI payments available to them, so they can make a more informed decision.

Fixed home loan EMIs

As the name suggests, fixed home loan EMIs can be paid for home loans linked with a fixed interest rate. The amount stays standard across your repayment tenor and makes it easier for you to realistically plan your repayment journey, as you have already insulated the amount against any market movements.

Flexible home loan EMIs

Flexible housing loan EMIs are also known as floating rate home loan EMIs. Such types of EMI amounts can be made for housing loans availed against a floating interest rate. In such cases, the EMI amount moves depending on macro-economic factors, and can reduce or increase over your repayment tenor.

Housing Loans are one of the most flexible credit options that are available to borrowers, to fund the purchase of their residential property. Often, depending on the borrower’s requirements, the lender can disburse the home loan amount in parts. Till the full loan amount isn’t disbursed to you, you are required to repay only the interest component of the principal loan amount. The amount you pay as the house loan EMI in the meanwhile is also called a home loan pre-EMI.

Borrowers are requested to start paying full Home Loan EMIs, only once the whole home loan principal amount is disbursed to them. Typically, the home loan repayment tenor can stretch up to 30 years, giving borrowers ample time to repay the amount at their own pace.

A home loan is a tax-benefit rich credit option, which is also why many choose to buy a second property as an investment – allowing them avail of tax benefits through their second home loans as well. There are several tax benefits and concessions attached to paying home loan EMIs, such as:

• Section 80C: You can claim a tax rebate on the principal component of your home loan EMI, up to Rs. 1.5 Lakh every year
• Section 24(b): You can claim a tax rebate on the interest component of your home loan EMI, up to Rs. 2 Lakh every year
• Section 80EE: You can claim a tax rebate on the interest component of your home loan, after you have exhausted the claim cap under Section 24(b), up to Rs. 50,000, only if you are a first-time home buyer

The home loan amortization schedule is a record of all the periodic payments on your home loan. Amortization is the procedure of repaying a loan through regular payments over a specified period and the 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.

The home loan EMI calculator shows you the amortization table, broken down to show you the details of your ongoing home loan interest rate, principal amount, repayment tenor, and balance repayment amount.

When you view the amortization table provided by the housing loan EMI calculator, here are the details visible to you:

• The total outstanding home loan balance
• The total amount paid towards the home loan
• The percentage of the loan amount paid
• The portion of the principal amount repaid
• The portion of the home loan interest repaid

Home Loan repayment refers to the process of repaying your entire loan (principal plus interest) over the agreed-to timeframe. Your repayment primarily depends on the timely payment of your Equated Monthly Instalments (EMI). Your EMI amount depends on the loan amount, the tenor chosen, and the home loan interest rate.

To repay your loan earlier than planned, you will need to make part prepayments or completely foreclose the loan with one lump sum payment. In case you have surplus funds and choose to become debt-free sooner, use our home loan repayment calculator to know the sum payable. This is important since a home loan is a sizable sum, which necessitates planning and research.

Lenders extend the part-prepayment facility to help you reduce your home loan EMI burden, and bring down your total repayment amount. By making frequent part-prepayments, you save substantially on the interest accumulation, as you repay the full amount well before the end of the repayment tenor.

There are several house loan calculator tools dedicated to calculating the savings made upon prepayments, and you can use those to assess the savings you stand to make on your housing loan EMIs.

There are several ways in which eligible home loan borrowers can reduce their home loan EMIs, with Bajaj Finserv. Eligible applicants who meet the home loan criteria with ease can benefit from lower interest rates and longer tenor – bringing down their total cost of borrowing the home loan. Here are a few ways to help reduce home loan EMIs:

• Scale up your down payment amount
• Focus on boosting your credit profile and CIBIL score
• Ensure maximum repayment capacity
• Pay off all pending dues and obligations
• Apply with a co-applicant to enhance your home loan application
• Select the right property that passes the lender’s verification

Not just that, but you also avail of a home loan balance transfer and transfer your pending home loan balance to Bajaj Finserv and repay the rest of your loan amount at a reduced EMI.

Existing home loan borrowers and new ones all have the same question, which is – what will bring down the cost of borrower faster – smaller EMIs, or a short tenor? There are several points to consider while making that choice.

Impact of choosing a shorter home loan tenor

Many advisors suggest choosing a short home loan tenor to close the home loan faster. However, this cannot be managed by everybody, as it means a substantially large home loan EMI commitment, and often – the amount may exceed your monthly repayment budget. Here are the results of choosing a short home loan tenor:

• You save on your total interest payable as you close the loan in bigger instalments
• You don’t carry on the loan obligation for long, and open yourself up to new investing and borrowing opportunities

Borrowers should consider the cost of the EMIs while choosing a short home loan tenor. While it does serve the purpose of reducing your home loan interest and total outgo, it can add pressure to your financial stability.

Impact of choosing smaller home loan EMIs

On the other hand, borrowers can also opt for reducing their home loan EMIs, to make the repayment process easier on their pockets. This can be ensured in the following ways:

• By securing a low home loan interest rate
• By opting for a profitable home loan balance transfer
• By choosing a longer repayment tenor

One of the concerns of opting a lengthy repayment tenor is the higher cost of funding, i.e., you end up paying much higher through your interest outflow. However, the borrower’s first concern should be paying the EMIs on time, without delays or defaults and by choosing a smaller, but easier home loan EMI commitment, you eliminate the risk of missing payments.

A home loan is a sizeable financial commitment and taking on one could mean that you will be repaying the loan amount for almost 25 to 30 years of your life. While the home loan repayment is still feasible and can continue along with your other financial developments, one can choose to repay their home loan faster, if their budget and repayment capacity allows for it. Here are two ways to do it:

Home loan part-prepayment

Home loan part-prepayment is a payment option that allows you to make payments toward your outstanding home loan balance, above your monthly EMI payments. This brings down your home loan balance, thereby, reducing the time it takes to close the whole loan account.

Home loan foreclosure

Home loan foreclosure refers to the process of closing your entire loan account through one lump sum payment, made ahead of your repayment tenor’s end. While part-prepayments can be done frequently, and in parts, to foreclose the home loan, you must prepay the outstanding amount in one go.

Both options help in repaying the home loan faster, and to see how much you stand to save by opting for either, you can make use of a home loan calculator. You can also avail of a home loan balance transfer to renegotiate your home loan terms and arrive at a plan that can help you repay your home loan faster. You also benefit from availing these facilities at zero additional charges, if you are an individual borrower with a floating interest rate home loan.

The amount you pay as home loan EMI is made up of the home loan principal and home loan interest in parts. However, where you stand in your repayment tenor also plays a role in deciding how much of the home loan EMI is composed of the principal amount and how much is the home loan interest.

If you wish to see your EMI break-up, you can do so in two ways:

• Manual calculations
• Home loan EMI calculator

Manual calculations have a wider margin of error, as the formula is complex, and with bigger numbers, one may make mistakes in the calculations. Here is the formula to calculate the same:

Interest component = P x R

Where,

P is the pending principal loan amount

R is the home loan interest rate

And then, you can subtract the interest amount out of the EMI, to arrive at the principal component.

To complete these calculations without any errors, make use of an EMI calculator and get error-free results in seconds.

Yes, you can. You can pay your EMIs in advance, by availing of the part-prepayment facility from Bajaj Finserv. If you are an individual borrowing with a floating interest rate home loan, you can part-prepay without any additional charges, saving even more on your cost of borrowing. By making frequent part-prepayments on your outstanding loan amount, you reduce the number of your housing loan EMIs, and thereby, bring down your total interest outflow.

However, here are some things to consider before you make part-prepayments:

• Evaluate where you stand in your repayment period, and if you’re already nearing the end of your loan tenor, it will make little sense to make additional part-prepayments above your EMIs.
• Ensure that you use a home loan EMI calculator to calculate your savings. If the amount is not substantial, you can reconsider the option.