How does Housing Loan Calculator Work

A housing or home loan calculator is the tool that is used to calculate the EMI. It has many names like interest calculator, EMI calculator, and loan calculator but they are one and the same thing. This calculator has made it possible for people to calculate their monthly installment they are liable to pay to the bank for the loan they have taken. This calculator is not restricted to the calculation of the installments of a home loan, you can know the monthly installments of all kinds of loans be it a personal loan, a car loan, a loan against property or a business loan, etc. However, if we talk about the home loan calculator, the usage is actually very simple and customer-friendly.  

housing loan calculator


Functioning of Loan Calculator

Focusing on the housing loan calculator in this article, let us see how can you calculate your EMI or interest with the help of this online tool called loan or EMI calculator. To start with, you must know that this tool would take into account the basic details of your home loan which are:

  • Loan amount
  • Tenure
  • Interest rate

Now, when you mention the above details in the calculator, it would give you the data of the EMI, the total interest outgo, and the total amount (principal+interest). Here is an example with the loan amount ₹20 lakhs with the tenure of 15 years and interest rate of 8.35% p.a.

EMI: 19,519

Total interest outgo: 15,13,480

Total amount: 35,13,480

EMI Formula-

Here is the formula to calculate the EMI or equated monthly installment:

E= P.r. (1+r)*n/((1+r)*n -1)



P=Principal loan amount

r= Rate of interest on monthly basis (r= Annual rate of interest/12/100)

n=Loan tenure

What makes Loan Calculator unique?

Even though there are many ways to do the calculation, a loan calculator is still different from others. So, here are the benefits of using a housing loan calculator:

Accurate results– One of the main advantages of using an EMI calculator is that it gives you accurate results, unlike manual calculation where the possibility to make mistakes is more. So, whenever you want to know the information about your loan, use an EMI calculator and get the idea of the exact payment you will have to pay to the corresponding bank.   

Time-Saving– Since everyone is getting busier each day, a tool like this makes it convenient for people to save time. As soon as you mention, the amount, the interest rate and the tenure you have been offered, you get the details of all the payments within few seconds.

Flexible Adjustable-You will be surprised to know that you are free to use the calculator n number of times. Yes, generally, people prefer using this tool before applying for any loan to check their affordability. By doing so, you get the option to do

Easy Comparisons– With the help of the calculator, you can compare all the home loan offers available in the market and then choose the best one for yourself.

More than EMI– The calculator gives the information more than the monthly installments like the total interest outgo and the total amount (principal+interest). Other than these, you get the amortization schedule.

Suits your Budget– When you check the installments in advance, you can see if you will be able to manage that particular amount without affecting your other financial liabilities.

Accounted Processing Fee– A normal EMI calculator would tell you the payments only on the basis of the interest rates. But, as you know there are some processing fees charged on your loan which is not included in the interest rate. Since, the interest rate offered by the banks do not count processing fees, w loan calculator would let you know the payment excluding the other charges. However, there are some calculators that would count the processing fees also.   

Now, as you can see the above benefits, it is quite obvious that a loan calculator is unique in all the ways be it the instant result requirement or the detailed information of the loan.

Top EMI Calculators in India:

In India, there are thousands of banks and NBFCs that provide home loans, hence there are n number of calculators as well. Having said that, a borrower can use any of the following calculators for his/her purpose:

  • Home loan EMI calculator HDFC
  • Home loan EMI calculator SBI
  • ICICI Home loan calculator

Thus, by going through the above details about the housing loan calculator, it will be quite easy and understood for you as a borrower to use this. With the help of this, you can know in advance your payments and for sure manage your other monthly financial expenses accordingly.

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