How an EMI calculator can help you plan your future.

Before we get into what this calculator is, let’s understand what an EMI is. EMI stands for Equated Monthly Installment. It’s the amount you need to pay every month in order to pay back the loan amount. Your EMI includes the repayment of the principal amount and the interest payment on your home loans outstanding amount.

Getting back to the topic, they say success doesn’t just happen, it needs to be planned. This couldn’t be truer when it comes to planning a successful home loan strategy. Because getting a home loan is more than just filling out the paper work & applications properly. Rather, to ensure you have a smooth home loan journey, a certain amount of foresight is essential. An EMI Calculator can go a long way in providing you the necessary foresight required to plan every step of your home loan journey and this article will help you understand what it is, the benefits of using one and how it works.

An EMI Calculator is a tool that helps you arrive at an EMI you can expect to pay for a specific loan amount and tenure. Arriving at an accurate EMI amount will help you plan your repayment strategy over the tenure of your loan that could be 10, 15 or even 20 years. This could save you from a whole a lot of financial turbulence and help you smoothen out every wrinkle in your home loan planning.

When you use such a calculator, you get three major benefits. Firstly it helps you plan finances by enabling you to decide the amount of EMI you can pay every month without straining your financial wellbeing. A calculator also helps you arrive at an amount you can afford to borrow. This will help you apply for the right loan amount and in turn increase your chances of approval. Using a calculator also helps you arrive at the down payment you will require and help plan your overall home buying budget.

How does it work? It’s actually very simple. Just enter the tentative loan amount you require, the interest rate you are comfortable paying, and the tenure you wish to take loan for. Once you’ve got all these numbers filled in, the calculator will tell you the EMI you would have to pay.

For instance, for a loan amount of Rs 5croreat and interest rate of 9% and 30 year loan tenure, you can get Rs.4, 09,527 as your EMI.

Wondering where you can find such calculators? Well you actually have a plethora of choices. Most leading lenders will have an EMI Calculator on their website. If you’re looking for an independent calculator, you can turn to one of the many home loan aggregators’ sites, they too have a calculator you can use to plan your finances.

Remember, this one simple tool can make things much easier and will save you the time and effort of manually calculating your EMI through mental racking or complex Excel formulae.