Before taking a housing loan, you need to first be sure that you can afford it. It makes no sense to take a loan and then not be able to pay it off properly. An EMI calculator can help you do exactly this. BankBazaar’s Home Loan EMI Calculator gives you an idea of how your loan will amortise over a given period.
This is a term usually associated with how a loan must be repaid over a certain tenure. When you use BankBazaar’s calculation tool, you will also get an amortisation table showing you how much of your EMI goes towards paying off the principal and interest components of your loan.
For salaried and self-employed professionals, the rate of interest charged by PNB Housing Finance on their property loans ranges between 9.1% p.a. and 11.25% p.a. Any housing loan applied for after 6 March 2019 will attract a floating rate of 9% p.a.
For businessmen and self-employed non-professionals, the interest rate ranges from 9.3% p.a. to 12.5% p.a. For a housing loan applied for after 6 March 2019, the applicable interest rate will be 9.15% p.a.
These rates are as of 23 Apr 2019. The bank may change these rates at its own discretion.
The bank charges you a fee for processing the loan. This processing fee usually is 1% of the loan amount subject to a minimum of Rs.10,000. Any taxes that apply to this fee will be extra. You must pay the whole processing fee when you apply for the loan. In case your application is not approved, the lender will retain Rs.3,000 plus taxes and refund the rest of the fee.
The maximum amount of loan you can take is Rs.2 crore. The maximum tenure offered by PNB Housing Finance is 30 years.
To get to know how amortisation works, we’re going to look at an illustration. For this, let’s assume the following inputs:
Loan amount: Rs.10 lakh
Interest rate: 9% p.a.
Tenure: 10 years
Processing fee: Rs.10,000 (10,00,000 x 1%)
The following table shows you how this loan will amortise over 10 years:
|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.
This depends on how long you want to take to pay back your loan. A short tenure means you get to repay the loan faster, while a long tenure will stretch your payments over say 20 or 30 years.
A short tenure means that your EMIs will be high and a long tenure will ensure that your monthly repayments are comparatively lower.
For example, take the table given above. You will have to pay around Rs.1.52 lakh every year, which translates to around Rs.12,666 every month, for the next 10 years. If you can afford to pay this amount every month, choose the 10-year option. If not, choose a longer loan period of 15 or 20 years. But, remember that when you choose a long tenure, you will also pay more in terms of interest.
Your PNB Housing Finance housing loan EMI depends on 3 main aspects. These are explained below:
1. Why should I calculate my EMIs before taking a loan?
Calculating your EMIs before you apply for a loan can benefit you in the following ways:
2. If I make prepayments, will my home loan EMIs change?
When you prepay a part of your loan, it reduces the outstanding principal. This will help you reduce the monthly instalment amounts by not changing the tenure. Or you can keep the instalment amounts the same and reduce the loan period. It is generally advisable to reduce the tenure of the loan and keep the EMI constant since you will pay lesser interest in the long run.
3. Are there any charges for prepayments?
PNB Housing Finance does not charge any fee if you prepay your housing loan carrying a floating rate of interest. For fixed-rate loans, the bank charges a 3% prepayment fee on the amount prepaid only if you pay using sources other than your own funds. If you use your own funds to prepay the outstanding amount, no such charge will apply.
4. Why are the interest charges in the amortisation table slightly higher during the initial months of the loan?
The interest rate of your loan is applied on the basis of “reducing balance principle”. Because of this, the interest will be slightly higher during the initial phase since the principal outstanding is higher. As this amount reduces, the incidence of interest will also come down proportionately.
5. Is the EMI calculator accurate?
As long as you give it the correct details, the calculator will generate the right details. That being said, the EMI quoted by the bank may be a little different from the one given by the calculator. This is because the bank may charge additional fees as per its discretion.
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