Loan repayment and EMIs are the first thought that comes to mind while applying for a home loan. Since it involves a substantial loan amount, repayment can quickly become an essential matter of concern if not appropriately planned. Considering that, financial institutions have invented a highly efficient online tool that helps borrowers plan their repayment by selecting the right loan term. The home loan EMI calculator helps calculate loan EMIs that the borrower must pay over a particular tenor.
Below, you will read about the working of a home loan EMI Calculator, factors affecting the calculation, and other crucial information. Read on to find more.
Uses of a Home Loan EMI Calculator
The PNB home loan EMI calculator helps you make an informed decision by calculating the loan EMIs. Accordingly, you can plan the finances and make timely repayment. An EMI calculator also furnishes the number of EMIs to be paid and the total interest outgo by the loan term-end. Consequently, an EMI calculator supports financial planning, allowing the borrower to maintain a steady cash flow while taking into account the loan EMIs.
What is a Loan EMI?
The first thing that hits our mind whenever we talk about a loan is the EMI. It stands for Equated Monthly Instalments, the borrower’s monthly payments for the loan. It includes both principal and the interest component on the loan amount. The EMIs contain a bigger portion of the interest during the initial stages of the loan tenure. As the loan term moves forward, the interest component starts reducing, and the principal part increases.
Factors Affecting the Loan EMIs
Reading the PNB Housing Finance comments will give an idea of the significant factors that affect the loan EMIs. Primarily, they include the following:
- Loan Amount: The principal amount that the borrower receives as a loan
- Interest Rate: The rate at which the lender charges the interest on the principal amount
- Loan Tenure: The repayment time frame within which the borrower must repay the loan to the lender
Steps to Use an EMI Calculator
A home loan EMI calculator is an easy-to-use online tool that delivers results within seconds. One may use this tool to determine the loan EMIs for different loan tenures. One must enter the following details in the tool to calculate the EMIs:
- Principal amount
- Loan tenure
- Interest rate
The mathematical formula to calculate the EMIs is
EMI = P × r × (1 + r)n/((1 + r)n – 1)
Here, P is the Principal amount, r is the rate of interest, and n is the number of months in the loan tenure. The loan EMI calculator uses this formula to calculate the EMIs according to the data provided automatically.
Enter the values in the relevant boxes, submit the data, and the PNB home loan EMI calculator will instantly calculate the loan EMI amount. Alter the data according to your repayment capacity until you find a loan term with easily affordable EMIs.
Features and Benefits of an EMI Calculator
- The tool calculates the monthly EMI amount within seconds based on the entered details.
- Knowing the EMI amount before finalising a loan deal helps plan the budget and manage consistent EMI payments.
- It gives an idea of the total interest outgo and the loan cost based on the borrowed loan amount and repayment tenure.
- The primary purpose of an EMI calculator is to select a loan tenure suitable to the budget.
- Since the tool calculates the EMIs automatically based on the values entered, there is no chance of error associated with manual calculations.
Since Home Loans keep the borrowers indebted for several years, a PNB home loan EMI calculator helps plan the finances and determine affordability before applying for a loan. So, take advantage of this online tool now and know your monthly financial obligations within seconds.