How To Calculate Home Loan EMI Accurately?

You can calculate home loan EMI through several channels of calculation available. You can use home loan EMI calculator, excel sheet or basic calculator. You can also calculate home loan monthly EMI via manual calculations. Here is the formula for Home loan EMI calculations.

EMI = (L*I)* {(1+I)^N / [(1+I)^N]-1}
where L is a principal amount, I is interest rate and N is tenure in number of months.

This formula seems simple enough. In most cases, your home loan EMI cannot extend beyond 30 to40% of your monthly income. You can run several reverse calculations to identify principal amount and tenure with home loan EMI calculator in India. But, you have to understand that calculating home loan EMI is not that easy. A typical home loan EMI calculator in India cannot anticipate several variables. They are classified as follows.

External factors:

Home loan EMI calculator is of no use with the considerable processing charges or the sizable stamp duty. You will need to calculate them separately and add to your current calculations. These factors tend to vary with property, lender and time. Thus, you cannot create a standard home loan calculation that supports these additions.

Internal factors:

In addition to these factors, the factors within the formula tend to vary as well. You found the best home loan in India. But, a lender increases interest rates. Your home loan EMI will increase. Interest rate and principal amount are in direct proportion with EMI. Reduce your home loan tenure your EMI will increase. Tenure is inversely proportional to EMI. So, the most important factor of home loan EMI calculations is variability. It will always be a factor influencing the final number. It will always be an invisible part of the calculation.

Thus, it is important to understand that it is nearly impossible to calculate home loan EMI accurately. You will need to leave some margin for these variables. Otherwise, any change in any factor may make it impossible for you to afford EMI. It is one of the reasons, why most lenders do not let you extend EMI to income ratio beyond 30 to 40% of your income. For the most accurate result, you will need something more than home loan EMI calculator in India. You will need a lender, who has all your details. They will include all necessary factors into the calculation to offer precise EMI. Though, it can be influenced by external factors, it can remain same without a major havoc in the economy and the real estate market.