Friday, June 21, 2024

How Online Home Loan Calculators Can Help You with Financial Planning? Know Here

Wondering what’s an online home loan calculator? Almost every financial institution including HDFC home loan has a home loan calculator on their site. Availing a home loan might be one of the most crucial decisions in your life and even looked upon as a turning point. Once the home loan is approved and you get the cash, you can become the owner of a dream home. You can also own a residential property through a home loan.

When you avail a home loan, you require paying the home loan EMIs. Your EMI next is computed depending on how much loan you have availed, how many monthly EMIs are you currently serving and how much interest constituent can you pay.  Factoring in the months involved, it may be an extremely complicated computation that cannot be performed using a traditional form of calculation. For this, you must have an online home loan EMI calculator.

What’s an online home loan calculator?

An online home loan calculator refers to the tool that you generally find on an online financial site, especially banks or HFCs. Distinct fields on the calculator allow you to input the details. These fields include the field of the principal amount, loan repayment duration, and preferred interest rate. Once you input details on all these fields, your EMI is computed instantly, which you must ensure to pay monthly.

The interface of the online calculator normally is user-friendly and mostly the adjustments are dependent on your requirements and needs. For instance, you might be able to make use of the first input field for choosing the loan amount you want. As the second option, you may have to select the repayment tenure and thirdly the interest rate.

However, while the interest rate will be determined by the bank, you can still use the online calculator to try out the distinct combinations and play around with distinct figures to reach out at the desired EMI. For instance, suppose, you are looking to avail HDFC home loan, and you are familiar with the HDFC home loan interest rates that you would be offered by the lender. Here in such a case, you can use an online home loan EMI calculator, to juggle out distinct figures like the interest rate, or tenure to arrive at the preferred EMI and overall loan cost as per preference. Once you have estimated the overall loan cost and EMI using the online home loan EMI calculator, you can reach out to the HDFC home loan lender and negotiate for the same deal. If the HDFC home loan lender agrees with the deal you present, then you can go ahead with the lender. However, in the worst-case scenario if the lender disagrees then you can move ahead with another lender agreeing on the similar deal you presented HDFC home loan.

How can an online home loan calculator assist you with financial planning?

When you avail a home loan you are supposed to pay back EMIs for several years like 20 to 30 years. Suppose you avail a home loan at Rs 50 lakh, you might require returning more than Rs 90 lakh. This might be nearly Rs 40,000 every month based on your interest rate and repayment tenure. Note that the loan EMI will have a major impact on your entire financial stability, month on month.

Earlier, it was tough to get an idea about how much loan EMI you would require paying unless you had extensive discussions with the lender’s rep. Nowadays with an online home loan EMI calculator, you can get an idea about all the home loan deals and your savings on your budget in just a few seconds. The home loan EMI calculator provides you with the result i.e., the EMI in just a few clicks. By knowing the loan EMI, you can better plan out your budget efficiently. You also can determine whether you can go for the home loan deal. So, by understanding the calculations of home loans before through an online home loan EMI calculator, you can better avoid awkward scenarios if any. Once you are aware of the home loan EMI, you can plan out your monthly budget in a more efficient manner. Using the online calculator, you can figure out whether according to your present earnings, will you be able to make payment of your EMIs. Taking a loan and later realising you cannot make timely EMI repayments can be disastrous. So, with an online home loan EMI calculator, you can financially plan and determine the EMI as per your repayment capacity, budget, and cash inflows.

What are the other ways through which an online home loan EMI calculator assists you in planning out financially?

Besides the ways mentioned above, an online home loan EMI calculator can even assist you in the listed ways – 

You can simply readjust your expenses – 

Once you get in advance how much you will be paying through home loan EMI, you can readjust the same as per your monthly expenditures to derive an agreeable or serviceable figure. There must be various expenditures you can avoid. Once you begin to think proactively, there are multiple ways you can employ to save your money.

You can select the correct lender – 

Distinct lenders might be providing distinct EMI choices for the same loan amount and repayment tenure. Even a decimal point change in the rate of interest can make a massive difference over the long term. As every bank come with its own home loan calculator, you have distinct options to explore and understand before you finally settle for a specific lender. Again, the home loan calculator is not as concise and precise as the quotes that you finally get from the bank but using the online calculator on the site endows you with a fair idea about the things that may come up your way.

Online home loan calculator assists in selecting the correct loan amount – 

At times there is zero need to go overboard because you are availing the loan. As long as you have the determination and will along with the potential and capacity to prove that you can repay the EMI on time, the lender will be ready to loan you anytime. But how much money should you ask the lender to give you?

Computing your home loan EMI using a calculator allows you to give an idea about how much loan EMI you are going to pay if you take this much loan amount. Accordingly, you can lower your amount to bring it as per your affordability level and may even increase your repayment tenure to be able to meet the burden of the higher loan proceeds.