Housing loan EMI calculators are surely one of the most important tools that any person, planning to buy a house, should use. These calculators make it easier the computation of probable monthly payments. Simply typing in a few parameters it becomes easy to calculate the amount you will have to pay every month. The housing loan emi calculator takes into account loan amount, rate of interest, and period of amortisation.
The calculators assist you in better financial planning. This way you can easily know how much you are committed to for the month hence you can be in a position to budget the amount. It is also possible to compare different loan options with the help of the calculator. This makes sure that you have selected the best of all the available options that are preferred by people of your financial status.
Factors Affecting Your Housing Loan EMI
The following are some of the considerations that affect EMI on housing loans. The first determinant is the amount which is offered or borrowed by the borrower in the form of a loan. If the loan amount is higher then EMI will also be high. However, interest rates appear to be a significant contributor to the fluctuation of foreign exchange rates.
The down amount which you pay also has a bearing on the EMI. As the down payment increases, the loan amount from the home loan finance company is minimized therefore decreasing the EMI easily. It is important if possible to put a considerable amount down payment. This will lower your monthly payment and the overall accrued interest you will make throughout the tenure of the loan.
Choosing the Right Home Loan Finance Company
Selecting the right home loan finance company is very important. A suitable lender should have reasonable interest rates, as well as, good terms and conditions. What you should look for while choosing a home loan finance company are the rates of interest to be charged, processing charges, and customer concerns or benefits. This means that it is wise to compare and contrast different lenders to arrive at the best decision.
However, the two most crucial factors include fluctuations in interest rates. Just the tiny differentiation in the rates ends up having a large effect on the Equated Monthly Instalments. While some lenders supply foreclosed homes with fixed interest rates, other lenders have variable or floating interest rates. They include fixed interest rates, which do not change throughout the loan thereby offering stability. Yet, floating rates can vary due to fluctuating market factors and forces. Therefore, depending on the level of exposure that one is willing to take, one can select an option of his/her preferred exposure.
The Role of Prepayment in Managing Your Loan
The use of a housing loan emi calculator helps you to lessen the burden of a housing loan. It refers to making one or several additional payments to the outstanding sum of the loan above the designated EMI. It thus decreases the amount of the principal to which interest is calculated, therefore reducing the amount of interest to be paid. Having explored the various home loan finance companies, most of them allow prepayment although it is recommended that one should go through the terms and conditions of such an option.
However, interest rates vary across the lenders, and some lenders have a prepayment penalty. This is when you request to pay off your loan before the time agreed between you and the lender, which involves an additional fee. Sometimes, the penalty is expressed as a specific percentage of the prepayment amount. However, many lenders, particularly those offering floating-rate loans, do not charge this fee. One thing you should always ensure before making any prepayment is whether or not you are subjected to a penalty. If there is, then determine if the amount of money that is saved in interest exceeds the penalty incurred.
Prepayment can also make you relieved to ensure that your loan will be paid early.
Conclusion
It is of special importance for people intending to take a housing loan to understand how a housing loan emi calculator operates. These calculators assist in making estimations of monthly payments and managing your Financial flow. The loan amount you apply for, the interest rate applied to the loan, and the tenure of the loan all have a bearing on your EMI. Worthy of note also are credit score rating and down payment. Selecting the right home loan finance company is appropriate. When seeking a loan check on the interest rates charged processing fees and the level of service provided by the lender. A method of lowering your loan workload is prepayment. It should reduce your interest charges and the time taken to pay off the loan. With these tools and properly taken decisions, it becomes possible to rein in on your housing loan and become a homeowner.
