With Money View’s Home Loan EMI Calculator, you can easily find out how much EMI to pay. You can also plan your finances and get them in order so that the loan repayment can be done smoothly. ...
To use the calculator, all you need to provide is the amount that you want to avail, the rate of interest, as well as the repayment tenure. With our EMI calculator, you can also find out the breakdown of your installments.
Read more| Year | Opening Balance | Interest | Principal | Closing Balance |
|---|---|---|---|---|
| 2021 | ₹ 2,00,00,000 | ₹ 9,28,204 | ₹ 54,67,659 | ₹ 1,45,32,341 |
| 2022 | ₹ 1,45,32,341 | ₹ 8,99,456 | ₹ 1,00,64,879 | ₹ 44,67,462 |
| 2023 | ₹ 44,67,462 | ₹ 1,01,020 | ₹ 44,67,455 | ₹0.00 |
Loans are repaid through EMI or Equated Monthly Installment which is a set amount determined by the principal amount that is borrowed, the interest rate charged, as well as the repayment tenure chosen. The amount can be fixed or variable and will have to be paid by the borrower to the lender each month.
We understand that calculating the EMI amount might be confusing which is why the Money View Home Loan EMI calculator is designed to be extremely simple. All you will need to do is follow the steps given below -
Our personal loan interest rate calculator is tailored to be extremely user friendly. Follow the steps below to calculate your monthly EMI online and plan your finances effectively.
Enter the loan amount borrowed by using the slider to adjust
Enter the rate of interest that is imposed which can be adjusted by using the slider
Finally, enter the repayment period that is chosen in either years or months
That’s it! The EMI amount along with the repayment schedule will be displayed.
If quick and easy EMI calculation is what you’re looking for then the Money View EMI calculator is perfect. You will no longer have to worry about miscalculating the EMI amount or worry about the correct formula to use.
The formula for calculating EMI is as follows:
P x R x (1+R)N / [(1+R)^N-1]
Where P stands for the principal amount that is borrowed
R represents the rate of interest imposed
N is the tenure in number of months
For example, if Rs. 50,00,000 is the amount borrowed (P), 10% is the rate of interest imposed (R), and the 120 months is the tenure (n), the EMI to be paid using the above formula will be:
50,00,000 x 0.00833 x (1+0.00833)^120 / [(1+0.00833)^120-1] = Rs. 66,075
The rate of interest (R) is calculated monthly i.e. it is calculated as (Annual Rate of interest/12/100) in this case (10/12/100 = 0.00833)
You may have come across the term ‘Amortization’ and wondered what it meant. Amortization is essentially a way to pay off the loan in equal installments every month and includes varying amounts of interest and principal payments over the course of the loan.
For eg. in the case mentioned above, for a principal amount of Rs.50,000 with interest rate and repayment tenure being 10% and 10 years respectively, the EMI amount based on the formula is Rs. 7,92,904 per year or Rs. 66,075 per month. This EMI amount over time results in a reduced principal and interest amount being paid every year until the loan is fully repaid. The table below illustrates the amortization schedule of this loan in detail.
| Year | Opening Balance | EMI Paid for Each Year (Principal + Interest) | Closing Balance | |
|---|---|---|---|---|
| Interest Repaid | Principal Repaid | |||
|
1
|
₹50,00,000 |
₹4,86,195 |
₹3,06,709 |
₹46,93,291 |
|
2
|
₹46,93,291 |
₹4,54,079 |
₹3,38,826 |
₹43,54,465 |
|
3
|
₹43,54,465 |
₹4,18,599 |
₹3,74,305 |
₹39,80,160 |
|
4
|
₹39,80,160 |
₹3,79,405 |
₹4,13,500 |
₹35,66,660 |
|
5
|
₹35,66,660 |
₹3,36,106 |
₹4,56,799 |
₹31,09,862 |
|
6
|
₹31,09,862 |
₹2,88,273 |
₹5,04,631 |
₹26,05,230 |
|
7
|
₹26,05,230 |
₹2,35,432 |
₹5,57,473 |
₹20,47,757 |
|
8
|
₹20,47,757 |
₹1,77,057 |
₹6,15,848 |
₹14,31,910 |
|
9
|
₹14,31,910 |
₹1,12,570 |
₹6,80,335 |
₹7,51,575 |
|
10
|
₹7,51,575 |
₹41,330 |
₹7,51,575 |
₹0 |
There are multiple factors that have an impact on the interest rate and subsequently the home loan EMI amount to be paid. Some of the important factors include -
Your credit score is a numerical representation of your creditworthiness. The higher the score, the better are your chances of availing of a loan as a high score indicates better repayment ability
Houses that are in newer or upcoming areas are considered to be more valuable or those that have amenities close by. Loans for such homes can generally be availed at a lower interest rate
The Marginal Cost of Funds based Lending Rate is the minimum that a bank or financial institution can lend at. This is decided annually and depends on various factors such as operating cost, the marginal cost of funds, etc. The interest rate imposed will increase or decrease based on variations in the MCLR rate
This is essentially the percentage of the property value that the loan can finance. The higher the loan amount availed, the higher is the rate of interest as the risk is greater for the lender
Salaried employees or those with a steady stream of income can generally avail of loans at a relatively lower rate of interest as the risk is much lower for the lender as compared to applicants who are self-employed
In addition to all of the above factors, the repayment term can determine the rate of interest imposed. Generally, a shorter repayment term leads to a lower rate of interest and vice versa
A home loan is nothing but a sum of money borrowed from banks or other financial institutions to fund the construction or purchase of a house. Certain home loans can also be used for home repairs or renovation. As is the case with other loans, home loans come with an interest rate determined by the principal amount borrowed as well as repayment tenure chosen.
EMI or Equated Monthly Installments refers to the amount paid by the borrower to the lender on a fixed date every month or as decided by both parties. This amount is determined by the principal amount borrowed, interest rate imposed, as well as repayment tenure, chosen.
EMI calculation can be made in two ways i.e., the flat balance or reducing balance interest method.
If the interest amount payable is based on the entire loan amount for the full duration of loan repayment, the EMI amount will not change during the tenure. This implies that the flat balance method was used for calculating the EMI.
However, in the case of reducing the balance interest rate method, the interest is calculated on the principal amount that is leftover or outstanding each time instead of the complete amount borrowed.
When availing of a home loan, you as a borrower must check which method is used to calculate your EMI amount.
Not paying the EMI amount will lead to penalties or the imposition of a higher interest rate. In case you are unable to pay your EMI due to unavoidable circumstances, talking to the lender and figuring out solutions such as moratorium or reduced EMI is necessary.
Not paying your EMI will also significantly impact your credit score.Yes, you can avail of tax benefits through Home loan EMI payments as illustrated below -
| Relevant Sections | Nature of Home Loan Deduction | Maximum Amount Deductible |
|---|---|---|
|
Section 80C |
Tax deductions on principal repayment |
₹1,50,000 |
|
Section 24 |
Tax deductions on the interest amount payable |
₹2,00,000 |
|
Section 80EEE |
Additional tax benefit for first time home buyers |
₹50,000 |
