Here’s How Intelligent Borrowers Use a Home Loan EMI Calculator


Applying for a home loan is always a sensible decision. A home loan lets you save money while fulfilling your cherished dream of owning a house. However, proper planning is essential to ensure optimal savings and seamless repayments.

A home loan EMI calculator simplifies your task of choosing the best home loan. It provides you with an accurate estimate of the home finance EMI before deciding the loan amount. 

The following sections elaborate on the mechanism of the home loan EMI calculator and the best way to use it. 

Home Loan EMI Calculator: A Primer

home loan EMI calculator gives you an insight into the amount you have to spend every month for fulfilling your cherished housing dreams. You only need to enter the following three things:

  • Principal – Principal refers to the loan amount you want to apply for. Lenders generally approve up to 90% of the property value when the loan amount is below INR 30 lakh. If your loan amount is between INR 30 lakh and 75 lakh, you can expect up to 80%. And if the amount exceeds INR 75 lakh, you may expect around 75%.
  • Interest – Interest refers to the extra amount you have to pay every month to avail the loan. When you pay the EMI, a part of it goes to principal repayment, and the other goes to interest repayment. 
  • Loan Term – The loan term of home finance generally ranges between five (5) and thirty (30) years. The loan term plays a significant role in determining the EMI. The higher the repayment term, the lower the EMI. 

While the principal and loan amount is easy to find, the interest is not.

Presently, home finance interest rates are hovering between 7.20% and 8.90%.

But, you cannot randomly put an amount on the home loan EMI calculator to get an estimate. So, here are the factors that affect the interest rate.

Top Factors Affecting Home Loan Interest Rates

  • Age – The lower your age, the better the rates. 21 is the minimum age, though. 
  • Monthly Income – The higher your monthly income after all deductions, the lower the interest rate.
  • Credit Score – If your credit score is above 750, you may expect the best rates. 
  • Property Location – If the property you wish to purchase is in a central location, you might get the best rates. This is because the resale value in a major town/city is higher than in places with modern amenities or connectivity. 

So, a home loan EMI calculator can give you the best results when you know the interest rate along with the principal and interest. Let us now understand the top benefits of using a home loan EMI calculator. 

Why Use Home Loan EMI Calculator?

The following are the top reasons intelligent borrowers use a home loan EMI calculator:

  • Accurate and Simple – An EMI calculator is easy to use and provides accurate estimates. 
  • Better Planning – Since home finance is a long-term liability, proper planning is vital. A home loan EMI calculator allows you to plan your expenses seamlessly.
  • Compare Lenders – You can compare lenders for free when an EMI calculator is by your side. 
  • Choose The Best Tenure – An EMI calculator lets you change the repayment term as many times as you want before arriving at a suitable tenure. 

The Takeaway

A home loan EMI calculator is all you need to plan your home finance like an expert. Remember to analyze your future earning potential and income security before taking a loan. A home loan EMI calculator helps you estimate your total repayment amount simply and quickly, and enables you to choose a tenure, a lender, and a policy that suits you best.