Most of the people aspire to live in the dream home but wait for the right time when they’ll be in a position to buy one with the wealth accumulated in the lifetime. Throughout the life, they save money in hope that one day they will own a house. But by the time they accumulate the amount, the economic condition change and prices soar. Which in turn results in further postponing the plans of moving into a self-owned home. Mind it, whenever you get a home of your choice just book it and the finance could be arranged easily by taking a home loan. There are number of banking and financial institutions that can assist you buying your dream home. But before choosing the financiers compare the housing loan interest rates charged by them. This will help you get the best deals and reduce the burden of repayment.
It is always advisable that the borrower must check the lending rates of various banks and housing companies before availing a credit facility. It is only after going through the rates and other product features that the borrower must select the lender and apply for the loan. The borrower must even calculate the repayment amount as this will help him plan the future expenses and save him from defaulting. The borrower can calculate the repayment amount by using the fixed deposit calculator.
In the further article, the housing loan interest rates of various banks and the method of calculating interest is discussed.
Home Loan Interest Rates Offered by Various Banks:
The housing loan interest rates of various banks are as follows:
State Bank of India-
The State Bank of India offers home loans at an attractive rate of interest. It charges interest at both fixed and floating rates. The fixed rate of interest on the loan amount up to ₹ 30 Lacs for first 2 years for women borrowers is 8.50% p.a. and for others, it is 8.55% p.a. While the floating rate of interest is as follows:
- Up to ₹ 75 lacs: The interest rate for women borrowers is 8.60% p.a. and for others, it is 8.65% p.a.
- Above ₹ 75 lacs: The interest rate for women borrowers is 8.65% p.a. and for others, it is 8.70% p.a.
The HDFC Bank provides housing loans at reasonable rates and for longer tenure lasting up to 30 years. The lending rates variates as per the slab. The rates prevalent on various loan amount are as follows:
- Up to 75 lakhs – For women applicants, the rate of interest ranges from 8.65 to 9.15% p.a. while for others it is 8.70 to 9.20% p.a.
- Above ₹ 75 lacs – The rate fluctuates from 8.70 to 9.20% p.a. for women applicants and for others it is 8.75 to 9.25% p.a.
At ICICI Bank, one can avail loan up to ₹ 3,00,00,000 for the maximum period of 20 years. The loan is charged at both fixed and floating interest rate. For women borrowers the floating interest rate variates from 8.65 to 8.80% p.a. and fixed rate ranges from 8.70 to 10.05% p.a. On the loan of amount up to ₹ 28 lacs, the rate of interest for weaker section borrower is 8.65% p.a. However, the floating rate of interest on loan availed by salaried and self-employed individuals ranges from 8.70 – 8.85% p.a. And the fixed rate variates from 8.70 – 10.10% p.a.
These were the rates offered by some of the banking institutes. But now it is important to know how are these rates determined or what are the factors that affect the interest rates. The factors that contribute to the determination of housing loan interest rate are mentioned below:
Factors Affecting Home Loan Interest Rate:
Income– The income of the applicant is the major factor that helps in deciding the loan eligibility and the rate of interest. The salary or the revenue earned by the applicant during a financial year is a major concern of all the lenders. The applicants with high income get loans at an attractive rate of interest.
Credit History– Another important factor that helps in deciding the lending rate is the credit history of the applicant. The applicant having clear records and good credit score are likely to get a loan at pleasing rates.
Location of Property– Unlike other loans, in a home loan the location and the surroundings of property make much of a difference. Even the name of builder/agency you are purchasing home from impacts the eligibility and rate of interest. So, it is advisable to buy a house from the trusted builders.
Value of Property – The value of property too affects the housing loan interest rates.
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.
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
- 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.
Total interest outgo: ₹15,13,480
Total amount: ₹35,13,480
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)
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.