Empower Your Budgeting with a Home Loan Calculator

Homeownership is a goal that the majority of Indians strive for and while the older generation bought homes after waiting and saving their entire lives, the younger generation is more ambitious and impatient. Not very surprisingly, the majority of homebuyers are people still in their 30s and 40s. 

Unfortunately, the last few decades have seen property prices reaching new levels. Most homebuyers these days, therefore, seek external financial assistance in the form of home loans. While home loans make the dream of owning a home affordable, the big ticket size and the long tenor involved can easily make home loan repayment planning burdensome. Borrowers often ask: which is the best home loan? The answer is actually quite simple: the best home loan is the one that you can conveniently repay. 

Repaying a home loan on time or ahead of schedule requires financial planning and this is where a home loan calculator can prove handy. 

What is a Home Loan Calculator? 

A home loan calculator is an online tool that most lenders host on their website and which borrowers can use any time they want without paying any fee. What does the home loan calculator do? The home loan calculator allows home loan borrowers to calculate their EMIs for the loan amount they wish to borrow at the rate of the interest they are being offered and the loan tenor that works best for them. 

Knowing one’s EMI in advance is crucial as it allows one to understand whether the loan amount they plan to or wish to apply for is affordable or not. Borrowers must also never overestimate their repayment capacity as life is unpredictable. So, one must always take emergencies and contingencies in mind while deciding the loan amount that one can comfortably afford to repay. 

Now, if one wants to calculate their home loan EMIs, this is the formula that will help them do so: 

Home Loan EMI = P x R x (1+R)^N / [(1+R)^N-1]


P denotes the principal or the loan amount borrowed, R is the monthly home loan interest rate and N is the loan tenor in months. 

Needless to say, this formula is complicated and involves many variables. Therefore, manually calculating one’s EMIs using this formula is not only exhausting and time-consuming but also increases the chances of errors creeping in. When it comes to loans that involve hefty sums and a long repayment tenor, even a small mistake can compel one to pay more in thousands and lakhs and hence, one simply cannot afford to make even a small mistake. It is, thus, that most home loan borrowers use a home loan calculator to calculate their EMIs. The home loan calculator is not only free but also easy to use. It asks users to enter only three values: principal, rate of interest and the loan tenor. As soon as a borrower enters these values, the home loan calculator gives them their loan EMIs as well as the total interest payout on their loan. The home loan calculator also gives borrowers their amortization schedule, which borrowers can use to plan prepayments and foreclosure. 

Here are some of the key reasons why all home loan borrowers must use a home loan calculator before applying for a home loan: 


  1. A home loan calculator helps borrowers decide the right combination of loan value and loan tenor so that they get EMIs that will be easy to repay. Thus, a home loan calculator saves borrowers from making wrong decisions regarding their home loans. It, therefore, also saves them from losing money by being compelled to pay a late penalty. 
  2. Home loan applicants can also use the home loan calculator to compare offers from different lenders. Since the calculator is quick, using it to compare offers requires one to spend only a few minutes. Further, the calculator gives loan applicants a clearer picture of what they can get concerning the loan terms and conditions, thereby helping them choose the right lender and offer for them. 
  3. If you want to repay your home loan ahead of schedule, you must make prepayments. If you want to benefit from lower interest rates, you must opt for a home loan balance transfer. However, home loan borrowers benefit most from prepayments and a home loan balance transfer when they time it right. The amortization schedule provided by the home loan calculator helps home loan borrowers in this regard. 


In conclusion, a home loan calculator is a useful tool that every home loan applicant must use before they begin the home loan application process. They must also apply for a home loan value they qualify for and make sure their credit score meets the CIBIL score range criteria of their lender. Doing so would allow them to get the best home loan interest rates and repay the loan without feeling burdened at any juncture of their home loan journey. 

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