A home loan from Axis Bank can help you buy the house you want. But how do you know whether you will be able to repay the loan on time every month? An EMI calculator tells you what your monthly repayment amount will be. BankBazaar offers you an EMI calculator to find out your housing loan EMIs. You also get your loan amortisation details.
Amortisation is the way in which you must repay your loan over the tenure you choose. Your EMI consists of repayments toward the principal and interest components. BankBazaar’s calculation tool and amortisation table show you how much of your monthly payments go toward each component.
As of 24 Apr 2019, Axis Bank charges the following interest rates (floating) for its home loans:
The bank also offers a fixed interest rate of 12% p.a. across all loan amounts for a period of 20 years.
The bank charges a fee to process your loan and disburse it. This is either up to 1% of your loan amount or Rs.10,000, whichever is higher. The fee you have to mandatorily pay at the time of application is Rs.2,500 plus any taxes that apply. This fee is non-refundable, even if your application is rejected.
The minimum amount of loan you can take is Rs.3 lakh and the maximum amount is Rs.5 crore. The shortest tenure available is 1 year and the longest is 30 years.
Now let’s look at an illustration to understand how amortisation works.
Let’s say you want to take a loan of Rs.10 lakh for a tenure of 10 years. Assuming the bank charges you an interest rate of 9.1% p.a. and a processing fee of Rs.10,000 (10,00,000 x 1%), you’ll pay an EMI of Rs.12,722. Here’s how your loan will amortise:
|Year||Principal Paid (A) (Rs.)||Interest Paid (B) (Rs.)||Total Payment (A+B) (Rs.)||Outstanding Loan Balance (Rs.)|
Note: The figures given above may be different from the actual figures you get from the bank in case the bank charges certain other fees as well.
This is a personal decision depending on how much each individual can repay every month. If you can afford to pay higher EMIs, choose a shorter tenure and pay off your loan at the earliest. But if you can afford only a smaller amount every month, choose a longer tenure.
Look at the above table, for example. The yearly repayment is around Rs.1.52 lakh. This is around Rs.12,700 each month. If you can afford this, choose a 10-year loan period. If not, it would be better to choose a longer period of around 15 to 20 years.
Having said that, do remember that the longer you take to repay your loan, the more interest you will pay.
Let’s take a look at the main factors that have an effect on your monthly repayments:
1. Do all EMI calculators function in the same way?
Yes, every EMI calculator that uses the principal amount, interest rate, and tenure for calculation works in the same manner. However, BankBazaar’s calculator also gives you the amortisation details so that you know how much of each EMI goes towards repaying the principal and how much is charged as interest.
2. Is the result displayed accurately?
Every EMI calculator works based on the inputs you give it. However, there sometimes may be a slight difference between your result and the figures the bank gives. This is because the bank may also include other fees and charges.
3. What is the advantage of calculating my Axis Bank loan EMI?
Calculating your EMI can help you in various ways, some of which include:
4. Do prepayments or part payments help in the long run?
When you make payments before they are due, they reduce the outstanding principal amount. Because the interest is charged on a reducing balance method, making prepayments help reduce your interest charges. This way, you can clear your loan faster.
5. I see that the interest charges in the amortisation table are higher during the initial months of the loan. Why is this?
Since the interest rate is applied based on the principle of reducing balances, the interest charges are slightly higher during the initial phase (since the principal outstanding is higher). As this reduces, the interest charges also reduce proportionately.
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