Understanding the Benefits of a Home Loan Calculator
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So, you have finally made your mind to be a homeowner. But, constructing or purchasing a house with your hard-earned money can be challenging. Hence, people often apply for home loans to fulfil their dreams. Home Loan
Lenders like PNB Housing provide a house loan calculator for free on their website.
As a borrower, you may use it to calculate the loan costs and get a near-accurate estimate of your repayment liability.
Scroll down to know about the benefits of a house loan calculator.
How to Use a House Loan Calculator
A house loan calculator gives you a near-accurate estimate of the EMI. EMI or Equal Monthly Instalment consists of the principal and interest.
A major component of the EMI is the interest. While you may analyse your requirement and decide the loan amount and tenure, you may need to talk to the lender for finding the home loan interest rate.
The home loan interest rate depends on multiple factors, including the borrower’s financial worth, net monthly income, credit score, age, property value, etc. The rates generally start from 7.5% and may go up to 13%.
A house loan calculator needs three figures to give an accurate result – principal amount, interest rate, and tenure.
The Benefits of House Loan Calculator
The following are the benefits of using a house loan calculator:
1. Plan Your Expenses
A house loan calculator lets you plan your expenses. When you enter the principal amount, interest rate, and tenure, the calculator displays the EMI. Knowledge of the EMI can help you choose the right loan amount.
Remember to select the loan amount properly, as any default in loan repayment can make you liable to pay the penalty.
2. Get an Accurate Estimate
When you calculate the EMI manually, you might make mistakes. Since it involves real money, any miscalculation can expose you to financial risks. A house loan calculator, on the other hand, gives you flawless results.
However, before entering the interest rate, you must know about the home loan interest. It is prudent to talk to a lender to find the interest rate.
3. Figure Out the Tenure
A house loan calculator allows you to change the repayment tenure as many times as you want.
Generally, you can choose a repayment term between 5 years and 30 years. A short loan term can make you debt-free faster.
However, you may witness a considerable jump in the EMI amount. Most borrowers choose a long repayment term of 20 years and above since they can repay the EMI without straining their finances.
4. Apply Directly
Often, you can use the free house loan calculator and apply for the loan directly.
Lenders like PNB Housing accept documents online. Alternatively, they provide doorstep service where the loan officer visits your house or office to verify documents and approve the loan.
Such convenience ensures that the borrower does not have to spend weeks or hours in anxiety.
Conclusion
When you apply for a home loan, you have to know about the eligibility criteria.
Besides the eligibility, you also need to know about the EMI amount since it enables you to calculate the net expense.
Using the house loan calculator is as easy as 1-2-3. Enter the home loan amount, interest rate, and tenure to see the EMI amount in seconds.
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