A home loan calculator would include the eligibility calculator, interest calculator or EMI calculator and the amortization calculator. With the help of these calculators, an individual can know each and every detail of the loan he/she has taken. The advantage of using these calculators is that you get to know your loan affordability with the help of which you can take the right decision.
In this article, you will get the little description of each of the above-mentioned calculators:
A home loan EMI calculator is also popular with the name interest calculator. It is the tool that is used to calculate the monthly installments of the loan. The major advantage of using a calculator is that you get accurate results instantly. Other than the accuracy, you get the advantage of knowing in advance, not only the EMIs or the equated monthly installments but also the total interest outgo and the total amount (principal+interest). This tool takes into account the following details:
- Loan amount
- Interest rate
On the basis of the above data, this calculation tool would give you the details of the EMI, Total Interest Outgo, and Total Amount. For instance, if you are taking a home loan with the below details:
- Loan amount- ₹20 lakhs
- Interest rate- 8.50% p.a.
- Tenure- 20 years
The payment details will be as follows:
- Monthly EMI- ₹17,356
- Total Interest Outgo- ₹21,65,552
- Total Amount (Interest + Principal)- ₹41,65,552
The calculator is easy to use and gives accurate results within few seconds. Hence, it is time-saving and customer-friendly both. Also, there are n number of online EMI calculator for home loan available in the market that you can use according to your convenience. Most importantly, the calculator gives you the option to check the monthly installments n number of times before applying. With the help of this, you can change your mind if you find the loan out of budget instead of getting stuck with a decision that might not be so pocket-friendly. Also, it is important to note that the calculators do the calculation without adding the processing fees. As you know, there is a certain processing fee included other than the interest rate which is generally 1-2% of the principal amount. So, if you will know the monthly installments, you can add the processing fees into it and then take the right decision.
An amortization calculator is interconnected with the EMI calculator. The difference between an interest calculator and amortization calculator is that the first one is used for the calculation of monthly installments and the second one tells you the annual interest outflow at the end of your tenure. In simple terms, for the above loan details, the amortization table would tell you the detailed information for each year until the 20 years of tenure. It will give you the details of the principal, total interest outflow and the balance amount of each year.
The importance of this calculator is that it gives the borrower the idea about the future payments he/she will have to make and if possible he/she can initiate the foreclosure process and close his/her loan.
The eligibility calculator is the calculator that helps the applicant know his/her loan eligibility. Since the interest rate and the loan amount that an applicant get on a particular loan are subject to change from lender to lender and from an applicant to applicant. Having said that, the eligibility calculator takes into account the following details:
- Type of employment
- Monthly salary
After you will fill up the above details, you will get the list of options that you are eligible for. You can check your eligibility with the help of the home loan eligibility calculator as per your convenience and profile in just a few seconds.
Crux of the advantages of using calculators:
- Accurate results
- Flexible Options
- Comparison facility
Thus, it is quite clear that different types of calculators have different benefits and the usage. So, using these calculators in is also the right thing before applying for a home loan.