Emi calculator housing loan

How to choose the best housing finance deal?

For most people buying a house remains the top most priority in life. While there are various financial mediums like traditional finances, borrowing from friends / relatives, home loans are the ideal solutions these days that will help you achieve this dream in a comfortable way. But due to the vast expansion of this segment, often shopping for the best home loan deal often becomes a daunting task for most first-time loan buyers. Especially, to know what amount of cover is required the interest rate applicable, processing fee, stamp due & registration charges, etc.

The articles helps you consider some factors while choosing the best Home loan deal for finance your dream turn into reality:

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There are multiple banks & housing finance companies and other non-banking companies who offer varied customized home loan policies. It becomes imperative to conduct a thorough research, compare loan, interest rates, applicable, principal amount eligible for, term and policies before choosing any particular scheme. Random application without any research might lead to unexpected price rise on your interest rates or lead to rejections as well. It might affect your credit score as well.
Your loan eligibility and EMI affordability will depend on the net income source, monthly expenses, additional sources, margin money, and credit score. A poor credit score will lead to increased interest rates or lesser principal amount qualification. Try to improve your credit score before applying for the best home loan deal.

Paying higher EMI’s will help you reduce the interest payouts. However, don’t let it exceed 40 to 50% of your net monthly income as there are other survival needs that have to be fulfilled on time. They should also not affect your long-term financial goals. Online home loan calculators help you find out your tentative EMIs based on your loan amount, the interest rate applicable and loan tenure.
Usually, lenders offer Home loan for a period of around 15 to 20 years. Therefore, it's advisable to keep your cash flow in mind while deciding on the monthly installment and tenure of the loan.
Interest rates are the crucial factor to decide the best home loan deal. It comes in three types – floating, fixed rate or mixed variant. For fixed rates, the interest rate charges are fixed throughout the entire loan tenure and for floating rate; it varies according to economic conditions, market volatility, etc. In case of mixed variant, the interest will remain fixed for a pre-determined period and then it becomes floating interest loan.

Your best Home loan deal should ensure it curbs the processing fees to cover various expenses incurred during the assessment of your housing loan eligibility and the value of your property. Ideally, these fees range between 0.5 to 1.5% and are generally non-refundable irrespective of the sanction of the loan amount.

With the advent of the internet, time is spinning across compare to the age old process of visiting banks or finance firms, filling up forms, getting copies attested and then submitting them, waiting for approvals and more. The home loan application is as simple as the click of the button on your computers. Visit the site, download form, upload the scanned copy of your documents and submit online. Within a couple of days, you will get an SMS or email notification about the loan approvals. There are various sites as well who offer chat service to clear all your doubts on housing finances. So, get set and apply for the best Home loan deal, now!

Emi calculator India

Emi calculator

Essential things to know while calculating interest on home loan…

Property loan emi calculator varies based on the loan amount, the applicant’s creditworthiness and prior relationship between the lender and borrower. These loans have two types of interest rates – fixed rates and floating interest rates. Under fixed rate loan the ROI remains constant throughout the loan period, while in floating rate loans the ROI is linked to market conditions and may change periodically. They could be linked to the base rate, inflation, or other parameters, each bank selects its own methodology to fix this base rate. These rates have to be declared by the bank each quarter. Some leading private finance companies offer loans in the form of adjustable rate of interest loan, Trufixed loan (2 to 3 year fixed rate variant) or Trufixed loan (10-Year Fixed Rate Variant).

The lending rates decided by banks or finance companies are determined by their cost of funds and the net interest margin they must earn to cover operating costs and also earn a profit. Finance companies or banks usually offer lower interest rates on housing loans compared to personal loans, because they grant finance against the security of the borrower’s home, which helps the banks to lower the financial risks.

While deciding an individual’s maximum eligibility for a housing loan, his or her income source is considered – this helps the lender determine the EMI that can be afforded by borrowers. Property loan emi calculator prove to be higher for people who work in the unorganized sector, while self-employed and salaried people who have stable income source can perceive loan at preferential rates.

Home loan monthly installment consists of two key components, the principal repayment, and interest applicable on the loan amount. When the rate of interest is high, the EMI component directed towards meeting the interest is also high, while the EMI’s principal repayment becomes lower. Therefore, property loan interest rates are crucial while deciding the calculation of home loan eligibility.

When a home is initially taken at a certain interest rate that later gets converted to floating rate, the applicable formula for the conversion is specified in the loan agreement. Currently, it is used as MCLR added with a spread determined by the bank as per the prospective borrower’s credit profile. As per the rules, private finance companies are required to revise their housing loan interest rate periodically either once every six months or once a year.

Most fixed Property loan emi calculator offers a fixed rate of loan tenure not exceeding 15 years. In the loan agreement, check the timeframe through which your housing loan interest remains fixed at the rate it was originally allocated. The loan agreement also explains the formula if your home loan gets converted to a floating interest rate.

Banks or finance companies provide loan up to maximum of 80% of the agreement value of the house. Every bank or finance company has its own criteria for which you will have to show the margin money of around 15 – 20% handy before applying for a loan.

Therefore, make sure you have saved at least 20% of the down payment and also have little extra savings to cover a few months of your home loan payment. Recession, health risks or other perils don’t come knocking at your door so it’s better to be prepared to cover your expenses for a couple of months. This shows your good preparedness towards your loan and you will have more probable chances for home loan approval. Few banks & private finance companies offer women with a concessional Property loan emi calculator compared to that applicable to male borrowers. This concessional rate is also applicable in case of a joint loan applicant. 

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Property loan emi calculator