Home Loan Basics: A Guide for Calculating Monthly Home Loan EMI

Dream home is a worthy dream and home loan is a great financial tool to avail it. For most people, it is their only chance to avail it. However, if you need a housing loan for buying a property, then all your decisions are connected to calculating monthly home loan EMI profitably. So, explore this article to understand the home loan basics and run home loan EMI calculations successfully. Whether you use a home loan EMI calculator or a excel sheet of a computer, this information will help take right decisions.

Parameters of home loan EMI:

Understand the factors that influence home loan EMI. Every factor can be changed in order to get an affordable monthly EMI. Some factors can be changed more easily than others. But all options are at your disposal.

* Cost of property
* Down payment
* Home loan protection plan
* Type of interest rate
* Home loan tenure
* Repayment option

These factors affect EMI. But, you cannot calculate their impact with any home loan EMI calculator in India. Most can calculate the impact of interest rate, tenure and principal amount. But, you will need to consult home loan consultant for other complex factors. There are few additional factors beyond an individual’s control. i.e. processing charges, stamp duty, repo rate, base rate, RBI regulations. Etc.

Tools for calculating home loan EMI:

There are several home loan EMI calculators in India. The advanced EMI calculators calculate more than monthly EMI. They display amortization table. They exhibit the proportion of principal amount and interest. The most advanced home loan EMI calculators incorporate repayment options too. But, any decent online calculator is good enough to run all possibilities and understand the factors that you need to change.

Factors to change for lower home loan EMI:

You control several factors influencing a home loan EMI. You can tweak them to get a superior home loan offer and/or a lower EMI. So, here is how you make smart changes.

To lower the principal amount, you can:

* Consider property in different neighbourhood, city, floor, etc.
* Consider a lesser number of rooms
* Increase the down payment.

To lower home loan interest rate, you can change:

* Credit score and credit history
* Debt to income ratio
* Current liabilities
* Current assets
* Down payment
* Type of interest rate

To reduce home loan tenure, you have to increase the monthly EMI. You can change a repayment option for a lower EMI too.

The best way to calculate and avail a suitable home loan EMI is to contact with personal finance experts. i.e. home loan consultant, relationship officer, etc. They will help you understand the home loan process and make the smartest decisions possible.