Home Loan EMI Calculator
A Home Loan EMI calculator is a super handy tool that helps in calculating the Equated Monthly Installment (EMI) for a home loan. Typically, it assists in budgeting and planning your finances before a home loan is disbursed from the financial institution or bank. To learn more about it, read the below page.
What is Home Loan EMI?
A home loan EMI (Equated Monthly Installment) is the fixed monthly amount you make to repay your home loan.
Hence, an EMI is designed to cover both of these components so that your loan amount is completely paid off with time. It is made in such a way that it continues throughout the loan tenure, which can range from a few years to a few decades.
How is Home Loan EMI Calculated?
By using the below formula, the Home Loan EMI is calculated:
- P refers to the principal loan amount
- R refers to the monthly interest rate (Annual Rate ÷ 12 ÷ 100)
- N refers to the loan tenure in months.
This formula considers the compounding nature of interest and ensures a fixed monthly payment over the entire tenure.
How Does an EMI Calculator Helps in Buying a Home?
A home loan EMI calculator plays a vital role in getting a homeownership. Here is how it is done:
Overall, it accurately estimates the EMI, giving a freedom to plan your finances in a better way and move closer to owning your dream house.
Is it Compulsory to Get Home Loan Insurance While Buying a New House?
When taking a home loan for your house, many lenders will suggest you get a home loan insurance policy. While this may seem like a new term or just another added cost, it plays a vital role in safeguarding your home loan repayment journey.
Let’s understand what it is and how it affects your EMI?
What is Home Loan Insurance?
Home loan insurance is a type of policy also known as mortgage loan insurance or Home Loan Protection Plan (HLPP) that covers your outstanding loan amount in case the borrower faces the following circumstances:
If any of these events occur, the insurance company comes in between and repays the remaining loan EMIs to the bank. Therefore, it acts as a financial backup for the family members and gives them peace of mind.
Why It is Significant to Have Home Loan Insurance?
Here are 3 primary reasons why home loan insurance is important:
How Can You Protect a New Built Home?
Often confused with home loan insurance, a home insurance policy is a different type of protection, which is equally important. While home loan insurance covers the borrower’s liability, home insurance covers the home itself against damage or loss due to:
Why is Home Insurance Needed?
Here is a list of primary reasons explained below for having a home insurance policy:
Combined Importance of Home Loan Calculator, Home Loan Insurance, and Home Insurance
While each serves a distinct purpose, the home loan EMI calculator, home loan insurance, and home insurance together form a comprehensive safety net for your homeownership journey.
While each of them serves a different purpose, the home loan EMI calculator, home loan insurance, and home insurance policy combined form a comprehensive safety for the homeowner.
Though these are separate products, they offer 360-degree financial security, allowing you to manage the finances smartly, borrow with confidence, and protect both your loan liability and your property against several circumstances. However, to find the estimated insurance premium for your house, you can also use our home insurance premium calculator in very easy steps.
FAQs - Home Loan EMI Calculator
-
Is it compulsory to take home loan insurance with a home loan?
Ans: No, it is not legally mandatory to take home loan insurance when applying for a loan. No, it is not a compulsion to buy home loan insurance when applying for a loan. You can buy it from a provider of your choice, such as Policybazaar.com. -
How does home loan insurance affect my EMI?
Ans: When the insurance premium is added to your loan amount, it definitely increases the total principal amount, which ultimately raises your monthly installment amount (EMI). On the other hand, there are some policies which allow for a one-time upfront premium that does not affect your EMI. -
Why is home insurance important for new home buyers?
Ans: As a new home buyer, a home insurance policy provides protection to your property and its belongings against various financial loss due to various unforeseen risks, including natural disasters. Basically, it secures your investment and provides peace of mind. -
Do EMI amounts remain constant throughout the loan tenure?
Ans: In fixed-rate home loans, the EMI amount remains constant throughout the tenure. On the other hand, in floating interest rate loans, the EMI may vary based on fluctuations in the market interest rates. -
Can I get home loan insurance from any provider?
Ans: Yes, you can buy home loan insurance from any provider rather than the lender offering your loan. -
What are the benefits of using a home loan EMI calculator?
Ans: Here are the benefits mentioned for using a home loan EMI calculator:
- Accurate EMI estimation
- Better financial planning
- Easy loan comparison
- Avoids over-borrowing
- Time-saving and user-friendly
