Home Loan Equated Monthly Instalment (EMI) is the amount payable against your loan on a monthly basis till the entire principal and interest is completely repaid. While majority of the initial monthly instalments are lined up to cover for the interest component, the EMIs towards the end of the tenure is mainly attributed towards the principal component. Knowing your EMIs can help you manage your finances better.
This is where BankBazaar’s home loan EMI Calculator comes into play. All you have to do is key in the required parameters and the automized EMI calculator will provide you with the estimated home loan EMI you have to repay against your home loan. The EMI calculator will also give you access to the amortization table based on the parameters entered earlier.
P: Principal amount
n: Number of monthly instalments
r: Interest rate associated with your home loan
The rate of interest associated with CitiBank home loan as of 23 Apr 2019 ranges between 8.60% p.a. and 9.10% p.a. The interest applicable can be changed by the bank depending on the risk factor of the applicant.
CitiBank charges you a nominal fee for the processing of the home loan. As of 23 Apr 2019, CitiBank charges a processing fee up to Rs.5,000 or 0.40% of the home loan amount availed. The processing fee is to be paid upfront while applying for the home loan.
Eligible borrowers can avail CitiBank home loans starting from Rs.5 lakh and up to Rs.10 crores. CitiBank also extended loan tenures up to 25 years to its customers.
Let us consider an example where you are availing a home loan of Rs.30 lakh from CitiBank for a term of 30 years. Let us assume that the interest rate associated with your home loan is 9.00% p.a. and the processing fee levied is 0.50% of the principal amount, i.e., Rs.15,000. Click on ‘Calculate’ once you have entered all the required input on the BankBazaar Home Loan EMI Calculator.
As per the values you have entered, the EMI calculated on your home loan would be Rs. 24,139
The break of the total amount payable on your home loan will be as follows:
|Total interest due||Rs.56,89,924|
|Total Amount Payable||Rs.87,04,924|
The amortization schedule illustrating the repayment of your home loan over the loan tenure from March 2019 to February 2049 will be
|Year||Interest Amount Paid (A)||Principal Amount Paid (B)||Total Amount Paid (A + B)||Outstanding Loan Balance|
There are mainly three aspects you should consider before choosing the tenure on your home loan:
Age: Most home loan lenders in the country consider age of the applicant before deciding the tenure on his/her home loan. Your age is inversely proportional to your home loan tenure. If you are in your 20s or 30s, opting for a long-term home loan would be a wiser decision as you would have enough time to clear your home loan debt.
On the other hand, if you are in your 40s/50s or nearing retirement, you can consider opting for a short-term home loan as you would only have a limited span of time to clear your home loans. However, for those nearing their retirement age, he/she can consider making their child as the co-applicant to extend the loan tenure. The lender will extend the home loan tenure based on the age of the co-applicant. The only requirement is he/she should also be the co-owner of the property. Hence, it is advised to consider your age before you decide on the tenure of the home loan to make sure your finances are not impacted by the EMIs.
Rate of Interest: The interest rate applicable on your home loan is the cost of credit you will be paying for the loan during the tenure. The rate of interest is directly proportional to the tenure of your loan. The longer your tenure is, the higher the interest rate will be. This will also result in higher EMIs during the tenure, increasing the total cost of credit on your home loan.
You can always utilize the home loan EMI calculator to get a better idea of how your home loan EMI payments will be. All you have to do is key in the necessary input on the EMI calculator and you will be provided with the EMI that will have to be made against your loan along with the break-up of the total amount payable during the tenure. You can also go through the amortization schedule to learn more about your EMI payments, i.e., how much of your monthly instalments are being attributed towards the principal and interest components of your home loan.
Income: You can also choose between a short-term and long-term loan by taking your monthly income into consideration. Choosing a short-term home loan when you are having a low income would not only make it difficult to manage your expenses but could also result in defaulting your home loan repayments. Hence, it is advised to go for a short-term home loan only if you have adequate/high monthly income. Making higher Equated Monthly Instalments (EMIs) will also help you clear your home loan sooner. However, it is advised to go through your budget and revise your financials before choosing a long-term loan in order ensure that the monthly instalments do not burn your pocket.
On the other hand, you can consider opting a home loan with a long tenure if you have a comparatively lower income. Since loans with longer loan tenures attract lower EMIs, the impact on your finances could be controlled with proper budgeting. You can also choose to increase your EMIs when your monthly income increases in the near future, allowing you to bring down the tenure or the interest rate applicable on your home loan.
1. What is the purpose of a Home Loan EMI Calculator?
The Home Loan EMI Calculator is a simple tool that helps you get an idea of how much your Equated Monthly Instalments (EMIs) can be by taking various components such as the principal amount, tenure of your home and interest rate into account.
What is Amortization Schedule?
The Amortization Schedule is a table illustrating your home loan debt repayments over the tenure on a monthly as well as annual basis. The table also indicates the break-up of your home loan EMIs towards the principal and interest component of your home loan.
What are the home loan EMI tax benefits?
Under Section 24 B of the IT Act, you can avail tax benefits up to Rs.2 lakh on the interest paid against your home loan. Under Section 80 C of the Income Tax Act, taxpayers are eligible for tax deductions up to Rs.1.50 lakh on the principal repayment on the loan.
Is making partial pre-payments beneficial?
Yes, you can make prepayments on your loan during the tenure. This will allow you to bring down the outstanding principal which you can either choose to reduce the tenure of your loan or lower the rate of interest, resulting in reduced EMIs.
How is Pre-EMI different from EMI?
Pre-EMI is the interest paid on the loan amount disbursed until the complete disbursal of your home loan. The pre-EMI is to be made on a monthly basis until the final disbursal is made. Only after the last disbursement is made will the regular EMIs commence.
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