Why Must A Home Loan Applicant Use An EMI Calculator?

Using an EMI calculator is an integral part of the entire home loan process. From the planning and application of the loan to the repayment process, a home loan EMI calculator can be used for a variety of purposes. The main reason why financial institutions encourage their customers to use the home loan calculator is to ensure they make their EMI payments on time.

In the case of home loans, when the financial institution approves an applicant’s loan, the house that is purchased with the loan is used as security. Until the loan is repaid by the borrower, the financial institution owns the house. Hence if the borrower defaults on any EMI payment, the institution may sell the house purchased to recover the loan amount. It is for this very reason; a borrower should avoid defaulting and make their payments on time. A home loan EMI calculator is one of the best tools available for free to help borrowers with this.

Before you apply for a home loan with a financial institution, it is important to find out how much EMI you will be required to pay each month. Using the EMI calculator for home loan you can calculate your EMI with ease. With the knowledge of how much EMI you have to pay you can take steps to save in advance to ensure that you have the required funds to repay the loan. You can also use the calculator to find out what combination of principal loan amount, interest rate and tenure to use to get the EMI amount of your choice.

There are two types of interest that financial institutions offer their applicants, fixed interest rate and floating interest rate. If you opt for a fixed interest rate, the EMI payments each month are fixed as well. However, in the case of floating interest rate, the EMI amount tends to change each month. Using the home loan EMI calculator one can calculate their EMI based on the changing interest rate. The calculator can also be used to predict the EMI amount the borrower will be required to pay. Since the interest rate keeps changing, the borrower can use the calculator to calculate two EMI amounts based on an estimation of how high or low the interest rate can go. This estimation allows the borrower to be prepared for any EMI rate and ensure they can repay the loan without defaults.

A home loan EMI calculator can be used for a variety of purposes. As a first time home loan applicant, it is crucial for the applicant to make the most of the calculator.