Knowing your EMI is an important part of applying for a home loan. It can help you compare various loans and see which one is the most advantageous to you. BankBazaar’s Home Loan EMI Calculator gives you a way of knowing how your loan repayments are to be done. The amortisation table gives you the individual principal and interest portions of your EMI as well.
Read on to find out how you can make the most of this tool while applying for your Canara Bank Housing Loan.
This is a financial term used to describe the process in which your loan will be repaid over the tenure you have chosen. It shows you your EMI and also gives you the breakup of the interest and principal components for each month. This way you will be able to find out how much interest you will pay in total over the period of your loan.
As of 24 Apr 2019, Canara Bank charges the following interest rates for its home loans - 8.75% p.a. to 9.4% p.a. for general customers and between 8.7% p.a. and 9.35% p.a. for women. The Canara Home Loan Plus (term loan) carries an interest rate of 11.45% p.a.
The bank charges you a processing fee of 0.5% of your loan. This is, however, subject to a minimum of Rs.1,500 and a maximum of Rs.10,000.
The bank offers you a property loan of up to Rs.3 crore. The maximum tenure you can choose is 30 years.
If you want to know how your loan from Canara Bank will amortise over a period of 10 years, take a look at the following illustration. We’re assuming a few details for this purpose:
Loan amount: Rs.10 lakh
Interest rate: 8.9%
Tenure: 10 years
Processing fee: Rs.5,000 (10,00,000 x 0.5%)
The table given below shows you the repayment schedule:
|Year||Principal Paid - A (Rs.)||Interest Paid - B (Rs.)||Total Payment - A+B (Rs.)||Outstanding Loan Balance (Rs.)|
Note: The figures in the table may vary from the actual figures given by the bank in case the bank charges certain other fees as well.
The period of your loan determines how long you have to repay what you owe to the bank. Some people prefer a short tenure of say 5 to 10 years while others may prefer a longer term of about 20 to 30 years. Your tenure usually depends on how much money you will be able to put aside every month to pay your EMI.
For example, in the above illustration, the repayments come up to around Rs.1.5 lakh per year for the next 10 years. This is around Rs.12,600 every month. If this is within your budget, a 10-year period will be sufficient for you. If not, choose a longer tenure of say 15 years and pay a lower EMI. But always remember that the longer your loan period, the more interest you will pay.
Let’s take a look at the main factors that have an effect on your monthly repayments:
1. What do I get from calculating my Canara Bank loan EMI?
Calculating your monthly payments when you take a housing loan from Canara Bank can help you in a number of ways, some of which include:
2. How do part payments or prepayments help in the long run?
When you infuse your loan account with additional payments, it reduces the outstanding principal amount, which in turn reduces the interest charges. This is because the interest is charged on a reducing balance method. This will help you clear the loan a lot quicker.
3. 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. 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.
4. Why are the interest charges in the amortisation table higher during the initial months of the loan?
Since the interest rate is applied on the basis of “reducing balance” principle, the interest charges are slightly higher during the initial phase since the principal outstanding is higher. As this amount reduces, the incidence of interest also comes down proportionately.
5. Is the result displayed accurately?
While every EMI calculator works based on the given inputs, there may be a slight difference in the result due to the inclusion of other fees and charges by the lender.
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