All banks and NBFCs work to generate profits and also to compete in the market, and they all wish to achieve maximum market share. The growth of banking or any other industry has been exponentially increased with the help of technology. The boom in technology is helpful to all countries especially developing countries, to help them and stand at the same podium as the world leaders.
A home loan, just like any other loan, is provided by banks and NBFCs to generate profits by the lending amount to eligible candidates and earn interest in addition to the principal after the loan duration. A home loan is a long-term debt for the applicants, and they use it to get their own house for themselves and their family.
A home loan provider is the one who provides the terms of the loan that are:
- Type of Interest to be levied.
- The interest rate.
- The tenure of the loan.
- The frequency of payment of EMI.
- The amount of EMI to be paid.
- Foreclosure in the event of prepayment.
- The processing charges to be paid at the time of loan dispersal.
Applicants are always at a disadvantage against the loan provider; hence all the financial advisers and experts suggest that applicants should gather all the relevant information themselves before applying for a home loan. Nowadays, gathering information has been made very convenient by the internet, which allows us to look up any information. Even a non-specialist can understand financial jargon with the help of the internet. An essential tool to be used to evaluate any home loan offer is a Home Loan EMI Calculator, which is quite helpful for revealing all the aspects of a home loan. An EMI calculator is a program that requires the input of all the factors such as amount requirement, tenure, monthly income, age, etc. It calculates the monthly EMI payable by the applicant and provides information about the terms offered by the bank on the basis of income and other factors of repayment ability of the loan. An EMI calculator uses a basic formula:
E = [P x R x (1+R) ^N] / [(1+R) ^N-1]Here,
- E = EMI amount or the Result
- P = Principal amount
- R = Rate of Interest
- N = Time period of the loan.
EMI calculation, though, is a complicated process. It can be done with ease by a computer program such as the EMI calculator. An EMI calculator has some benefits for home loan applicants that can be explained as under:
Simple calculation: To calculate the EMI repayment, all a customer has to do is enter the loan number, rate of interest, loan tenure, and processing fee (if available). The home loan calculator will perform the calculations, and the calculator will also have the EMI number.
Choosing the correct loan tenure: After determining the exact EMI number, a person may choose the appropriate loan tenure. They can either pay a high EMI and select a brief tenure period to pay off the loan fast, or they can deliver a lower EMI and prolong the loan period.
Advantageous for loan management: After making EMI payments, a customer can have any spare funds available to make prepayments. A home loan EMI tracker will make a customer go over their finances again to see if a prepayment can help them pay off the loan before the term expires.
Comparing loan deals: The loan calculator can be used to compare loan offers from various banks. The net cost of the loan, as well as the corresponding EMIs, are shown in the results. This assists the borrower in determining the right choice for them and selecting a loan that meets their particular needs.
Accurate results: It is human to make mistakes, and when a measurement is made manually, a miscalculation can occur without the customer's knowledge, resulting in incorrect results. The findings of an online home loan EMI calculator will never be wrong; all measurements are performed with utmost precision.
After understanding all this, it is a wise choice for applicants to use an EMI calculator before applying for a Home Loan. The websites of all banks have a section of banks have home loan sections available, for example, Home loan at Dena Bank is available on their website, and Dena bank and almost all the other banks have their own online presence with their own home loan EMI calculator algorithms present.
Must Read:- Advantages Of Home Loan
