Simple Steps To Use An EMI Calculator For Your Home Loan #start #up #business #loans
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Simple Steps To Use An EMI Calculator For Your Home Loan
Nov 16, 2015
EMIs are the Equated Monthly Installments which each borrower has to pay every month to the financial institution to repay the loan amount. The EMI for any individual is calculated taking three factors into account. The principal loan amount, the interest charged and the tenure of the loan are used to calculate the EMI. Most financial institutions provide their customers with an EMI calculator for home loans free of cost.
All home loan applicants must use this tool to calculate their EMIs for the month. The reason being that rather than calculate it by oneself which can lead to miscalculation and incorrect amounts. The incorrect calculation can have a serious effect. If the individual does not repay the correct EMI on time and defaults on their payment, they can face serious problems with the financial institution. One of the repercussions of defaulting on the repayment of the loan is that it reduces the individual’s credit score. A low credit score can make it difficult for the individual to get loans approved in future. Another repercussion which is far more serious is that the financial institution may sell the house purchased and get back the loan amount.
Hence all home loan applicants must make use of the EMI calculator for home loan to calculate their EMIs and make their payments of time. This tool can be also used by individuals who have opted for a floating interest rate. Since the interest rate is constantly changing, the individual must use the calculator to calculate two EMI amounts. These amounts will be calculated using a predicted increase and decrease in the interest rate. This allows the individual to be prepared for both scenarios and be able to afford the EMI charge.
EMI calculators for home loans are fairly easy to use by any individual. They are easily available and all that is required by the individual is to fill in the details. Using the information present in the home loan contract, the individual can fill in the principal loan amount, the interest charged by the financial institution and also the tenure of the loan. The calculator will then provide the EMI required to be paid. The calculator also provides details about the amount of interest and principal loan amount is being paid in each month’s EMI. This information comes handy for those who are planning to prepay their home loan.
This EMI calculator for home loan is extremely easy to use. Using this tool ensures that a borrower repays the correct EMI amount every time.
About the Author
The author is a seasoned writer on finance topics and through her writing; she articulates aspects of home loan that are important to people availing the housing loan facility. She writes about a variety of topics covering the home loan documents, rates, & EMI calculator for home loan that help to make the best decision.