How to Reduce EMI with Home Loan Calculator?

Most lenders and borrowers select an amount, which is 30% to 40% of monthly income. Thus, this single expense constitutes the biggest monthly and annual expense. There is no surprise that home loan EMI happens to be the center of all financial decisions for most home loan borrowers. It makes sense to lower home loan EMI and fit it into current financial constraints as comfortable as possible. So, here are few techniques that will help you lower your home loan EMI with a simple home loan calculator.

What’s in my principal amount?

Most borrowers do not stop to ask this question while running multiple home loan EMI calculations. The principal amount is calculated differently by each housing finance company. Every borrower will need to pay several additional expenses along with a cost of a property. i.e. processing charges, service taxes, legal fees, stamp duty, etc. So, understand the composition of the principal amount. If you gather requisite funds, you can exclude a few details from the principal amount and pay them up front. For example, home loan protection plan. This will lower principal amount. Enter the lowered amount in the home loan calculator. You will receive a lower home loan EMI.

What is my home loan interest rate?

Every housing finance company advertises the best home loan rates. But, unfortunately, these rates are not available to everyone. The home loan rates will vary as per borrower’s financial and professional conditions. So, do not calculate monthly home loan EMI with a presumed rate of interest. You may not avail the loan at an advertised rate. However, you can talk with a relationship officer of a housing finance company. You can consult with a housing finance consultant. You will receive a realistic idea about home loan rate and strategies to lower them. You can run these numbers through any home loan calculator in India. If you understand how lenders determine the home loan rate, you can lower it. It will lower your EMI too.

What are the different home loan repayment options?

The common home loan calculators in India do not accommodate repayment option. But, they have a significant impact on your housing loan EMI. Thus, find a home loan calculator with repayment option. This will allow you to select a suitable repayment option and lower your EMI without influencing the vital aspects of EMI. This is a great strategy because your income can increase with increasing age and experience. Thus, you can choose step up repayment option confidently in such cases. Use a right home loan calculator, though.

So, how do you plan to lower your home loan EMI?