Why Should You Calculate the EMI before Taking a Home Loan?

Deciding the amount of the loan depends on the affordability of the emi.  Every financial institution will first check how Much Emi An applicant can afford paying and on the basis of the amount of the loan is decided and the home loan is sanctioned.  Thus it is recommendable that the applicant should also check the emi he will have to pay to the bank every month using the home loan Emi calculator.  This will not only help him in checking the Emi That Is payable but also he can check the amount he is eligible for.

Aspects that affect the Emi

Mentioned below are the three main factors that help in deciding what can be the Emi on the loan. 

Income:

Income plays an important role depending on the income the lending institutions render loan to an individual. The emi amount should not be less than 40% of the monthly income of the individual.  This is to make sure that the loan applicant has enough money to meet his expenses. Even though an individual is optimistic about the rise in the income he should also take into consideration factors like the inflation rate, job security and the emergency requirements. The emi should not exceed 40 % of your income. An individual should have at least 15% in his hand to save and use for other purposes.

Changes in the rate of interest:

When you calculate the emi using the home loan emi calculator the interest rate plays an important role.  Though low home loan interest rate might attract you to avail for a huge home loan amount it is not advisable to do so as an individual needs to have some money to be used for emergency purposes.  Also the choice between the fixed and the floating interest rate will help you in saving and you can save on the Emi. If you opt for floating interest rate the percentage of the interest will depend on the market fluctuations and thus the interest paid is generally low.  But for fixed interest rate the interest rate remains fixed throughout the repayment tenure of the loan.  Generally if a person wants to cut down not the interest rate he can opt for floating interest rate.

Expenses related:

 While an individual decides to jot down the expenses it is very important that he needs to calculate the emi using the home loan EMI calculator along with this he can also calculate the monthly expenses that occur for him during a particular month. This will help in planning the month without creating any financial burden on him. Thus, he can make sure that he has enough necessities while he dreams to own a house.

Why is necessary calculate the EMI?

Calculating the emi with the help of the home loan EMI calculator helps in determining the loan amount which is to be borrowed. It is essential to calculate the tenure of the loan to check the affordability of the loan.  It is also necessary to compare the pick the best home loan offered lending institutions which has additional benefits like the lower home loan interest rates

The home loan emi calculator is different from the other types of loans. Thus when an individual is planning to apply for a home loan he needs to decide and make use of these online home loan emi calculator to avoid the further confusion. Earlier the emi was calculated manually which has manual errors. But now a person can simply visit the website and calculate the emi he needs to pay for the next 18 years.