When estimating the instalment for mortgage advances like , it is useful to understand its calculation. The following describes how a mortgage loan calculator accurately computes EMIs as per the loan amount and tenor selected.
Formula of EMI calculation –
EMI = [P x R x (1 + R)^N] / [(1+R)^N-1]
P = Principal loan amount
R = Monthly applicable interest rate
N = Number of monthly instalments
For example, if the mortgage loan amount is Rs.20 lakh at 12% annual rate of interest for 10 years, the amount of EMI would be –
[20,00,000 x 1 x (1 + 1)^120] / [(1 + 1)^120-1] = Rs.28,694
Once you input the loan amount, tenor and interest rate to the mortgage calculator, it utilises this formula for accurate EMI estimation within seconds.
Benefits of a mortgage loan calculator
Individuals should know the advantages of a mortgage loan calculator so they can use this tool to maximise the benefits of their selected loan and Open Calculator service it affordably.
- A mortgage advance comes with a repayment liability over an extended tenor and engages a sizable payout. So, loan affordability is one of the essential factors to be considered as it can impact one’s long-term finances. With this loan calculator, individuals can accurately estimate how affordable an EMI option can be and pick accordingly.
- This simple calculator also helps borrowers to decide what loan amount they should obtain as per their repayment capacity.
- Besides, if borrowers are looking for a LAP loan foreclosure, this handy tool can be useful to figure out whether prepayment would be cost-effective or not as it also offers a look at the amortisation schedule.
Also, while availing mortgage loans, borrowers should prefer financial institutions offering affordable interest rates, balance transfer facilities, etc., for efficient loan management.
Moreover, lenders have also come up with pre-approved offers that help in quick loan processing. Individuals can find these offers on home loans, loans against properties, and several other financial products. They can look at their pre-approved offer by submitting their contact number and name.
As for mortgage loan calculators, individuals can access them online at some reputed lenders’ official website. They can utilise this convenient computing tool to secure an affordable yet efficient repayment option for their property loans.
Moreover, applicants should also be aware of the factors that affect the interest rate for loan against property and avoid those habits that can damage their eligibility. This should help in availing competitive rates and further increase loan affordability.