Why do Online Loan EMI Calculators Give the Option to Change the Interest Rate?

Since purchasing a house is one of the most significant decisions, individuals do not abstain from spending a substantial amount to buy their dream houses. This is where a housing loan comes to the rescue. However, managing a home loan can become complex at times. To ensure financial planning, individuals can use a housing loan EMI calculator. This online tool allows users to change the interest rate. Find out why.

Reason behind EMI calculators allowing the change in interest rate

An online loan EMI calculator allows individuals to calculate their equated monthly instalments at leisure. This online tool calculates housing loan EMIs based on the amount of your loan, tenor, and the interest rates offered by different financial institutions.

For example, the interest rate charged by one lender may be very different from that offered by another lender. As a result, an online house loan EMI calculator employs sliders in three areas, including in the field of interest rate.

As a result, one can shift and shuffle the slider’s amounts, values, and rates to get the exact estimates. This helps individuals plan their loan repayments efficiently and reduces the chances of loan defaulting. Additionally, this online tool allows borrowers to calculate the interest and principal component of home loan, which can help plan home loan prepayments or part prepayments.

Steps to use a housing loan EMI calculator

A home loan EMI calculator allows individuals to easily calculate housing loan EMI. It also helps in financial management, which is one of the easy ways to pay home loan faster. Mentioned below are the steps to use this online calculator:

Step 1: Visit the website of a preferred lender and navigate to the home loan EMI calculator page

Step 2: Fill in a few details, such as the loan amount, loan tenor and interest rate

Following this, the calculator will estimate EMI instantly. Individuals can use the sliders to alter the amounts until they arrive at an affordable EMI. This will help them decide the loan amount and tenor depending on their repayment capacities.

Apart from that, this online tool also shows housing loan amortisation schedule. This table displays details relating to the interest and principal amount of a loan.

Benefits of using a housing loan EMI calculator

There are various benefits of calculating EMIs before taking a home loan. Find about them below:

  1. Helps decide the loan amount

Utilising a housing loan calculator allows prospective borrowers arrive at a loan amount that fits within their repayment capacity. One can alter the loan amount in relation the tenor and interest rate to decide a corpus that fits his/her budget. In this regard, note that a higher loan amount results in an increased principal, which increases the EMIs. If this is the case, one can reduce EMIs with a home loan balance transfer.  

  1. Helps plan prepayments

Calculating EMIs before applying for home loan can help borrowers plan prepayments accordingly. Several financial institutions offer this facility, which allows individuals to pay a significant chunk of loan amount before the tenor end. This results in a decrease in the interest amount and reduces the EMIs.

By using a housing loan interest calculator, one can know the amount that goes towards the interest and principal component every month. This would help in efficient and effective planning of loan prepayment or part prepayment.

  1. Helps compare between lenders

In addition, One of the most crucial benefits of a housing loan EMI calculator is that this tool helps individuals compare between different lenders available in the market. In addition, One can simply enter the details and assess which lender offers home loan at the most affordable rates. This will result in an informed decision making.

In this regard, prospective borrowers should check additional offers extended by financial institutions. For instance, certain NBFCs across the country provide specialised offers on loans. These offers, also called pre-approved offers, help streamline, simplify and fasten the loan application procedure. Further, they are available on various financial products, such as home loans and loans against property. In addition, You can check your pre-approved offer by entering your name and contact details.Evidently, a housing loan EMI calculator is a feasible online tool that helps in proper financial planning and assists borrowers in making easy repayments.
Improper financial planning can delay loan repayment, leading to defaults. Defaulting on home loan EMI can have severe outcomes, such as a drop in credit score, issuance of legal notice and more. Knowing how to calculate home loan EMI can help borrowers steer clear of such situations.
In addition, Computing EMIs through a home loan EMI calculator is an easy and convenient process. However, before proceeding, one should check the eligibility parameter and work towards fulfilling them.