Home loans are essential for most people looking to purchase a home. With real estate prices constantly on the rise, it is challenging to buy a home without financial assistance. However, availing a home loan is not sufficient to ensure a stress-free purchase of your dream home. You must also plan your repayments efficiently, making use of a home loan EMI calculator.
A home loan EMI calculator is a tool that helps you calculate your monthly EMI (Equated Monthly Installment) payouts. An EMI is a fixed amount that you repay every month to the lender until you have paid off the entire loan amount. It comprises the principal amount and the interest charged on the loan amount. The EMI repayment schedule is decided by the loan tenure and the interest rate applicable to the loan.
Housing Loan Eligibility:
Before applying for a home loan, it is essential to assess your housing loan eligibility. There are several factors that lenders consider when evaluating your eligibility, including your income, credit score, age, employment status and type, existing liabilities, among others.
To qualify for a housing loan, the borrower must have a steady source of income. Most banks require the borrower’s annual income to be above a certain threshold to ensure that the borrower can repay the loan without defaulting. The borrower’s credit score is also a crucial factor in determining their eligibility. A good credit score reassures the lender that the borrower is financially responsible and can manage their finances well.
Housing Loan Process:
Once you have evaluated your housing loan eligibility, you can proceed to apply for a housing loan. The housing loan process typically involves the following steps:
- Application submission: You will have to fill out an application form and submit it along with the necessary documents to the lender.
- Credit assessment: The lender evaluates your creditworthiness by checking your credit score, income, employment history, etc.
- Loan approval: If you meet the eligibility criteria and the lender is satisfied with your creditworthiness, they will approve your loan application.
- Property valuation: Next, the lender will conduct a property valuation to estimate the property’s market value.
- Loan disbursement: The lender disburses the loan amount to the builder or seller once all legal formalities are completed.
Repayments with Home Loan EMI Calculator:
Repaying a home loan can be overwhelming, especially if you are not aware of the EMI payouts. A home loan EMI calculator can help you plan your repayments efficiently. Here are the benefits of using a home loan EMI calculator:
- Helps you determine the EMI payouts: A housing loan EMI calculator helps you calculate your monthly EMI payouts based on the loan amount, interest rate and tenure. Knowing your EMI payouts can help you plan your monthly budget and expenses.
- Aids in choosing the right loan amount and tenure: A home loan EMI calculator enables you to experiment with different loan amounts and tenures to find the one that fits your requirements and budget.
- Allows you to compare interest rates: Home loan EMI calculators from different lenders allow you to compare interest rates and choose the most affordable one.
- Helps you save money over the long term: A home loan EMI calculator enables you to calculate the total interest payable over the loan tenure. This information can help you re-evaluate your loan amount and tenure, opt for prepayment or switch to a lower interest rate if it saves you money over the long term.
Conclusion:
A home loan is a significant financial commitment that requires planning and preparation. One of the most crucial aspects of availing a home loan is to plan your repayments efficiently. A home loan EMI calculator can help you calculate your EMI payouts, choose the right loan amount and tenure, compare interest rates and save money over the long term. By using a home loan EMI calculator, you can streamline the home loan process and make your dream of owning a home a reality.
