Learn About EMI and Prepayment Strategies For Homeownership

Have you ever taken a big step in investing in a home? One must become familiar with mortgage loans. From understanding how much you’ll need to pay each month to consider prepayment, A mortgage loan EMI calculator is a valuable tool that helps to estimate the monthly installments (EMI). The EMI calculator allows you to adjust inputs such as the loan amount, interest rate, and tenure to offer you the precise monthly payment amount.

How Does a Mortgage Loan EMI Calculator Work? 

To use a mortgage loan EMI calculator, you'll need to input the following information:

Loan amount: This is the sum of money which you want to borrow together. 

Interest rate: It is the kind of annual percentage rate charged on the loan. 

Loan tenure: This is the time frame for the given loan, and can be in the form of years or months. 

Repayment frequency: This shows how frequently you will be making payments, usually in the form of monthly installments.

Once you have entered the information the calculator will calculate the EMI that you need to pay each month.

Why Use a Mortgage Loan EMI Calculator?

There are several benefits to using a mortgage loan EMI calculator:

Helps You Plan Your Finances: A Mortgage Loan EMI calculator assists you in planning the amount that you will be required to pay each month towards your home loan. This will help you have a clue whether the loan is within your reach and whether it will leave you strapped.

Compares Different Loan Options: To compare different loan options offered by different lenders, one can use a mortgage loan EMI calculator. This can assist a borrower in identifying the right loan solution about one’s ability to make the payment.

Helps You Make Informed Decisions: This can help you make the appropriate decisions related to home loans possible. For example, you will use it to compare the amount of interest that would be charged taking into account a shorter loan period or comparing with it two different interest rates.
 

Factors influencing Mortgage Loan EMIs

Various aspects could influence the EMIs you have to pay on a home loan. These include:

Loan Amount: A higher loan amount means the higher EMIs.

Interest Rate: The higher the rate of interest, the higher the installments or in other words, the EMIs will be.

Loan Tenure: As the time to pay back the borrowed amount increases, the monthly installments payable will reduce. However, the overall amount that is paid back in the form of interest will be higher.

Home Loan Prepayment Calculator

A home loan prepayment calculator is another analytical tool that can be relevant for home loan borrowers. This calculator will assist you in calculating how much you require to prepay on the home loan to bring down the remaining principal amount and the total interest you will have to pay to complete the home loan term.

Knowing all those facts, it is quite easier to understand how a home loan prepayment calculator will work. You need to follow the same steps as any calculator that is putting the loan amount, interest rates and loan tenure. However, the only additional input that you need to put in is the prepayment amount.  It is the sum of money that you wish to have paid beforehand or the sum of money to be initially paid on the loan.

After you have put this information into the calculator, it will give you the new outstanding principal amount you will have to pay as well as the total interest that you will require to pay on the remaining period of the loan.

Advantages of Using an Online Home Loan Prepayment Calculator

There are several benefits to using a home loan prepayment calculator:

Helps You Reduce Your Loan Tenure: Availing prepayment on your home loan can be useful to you in getting rid of the remaining period of your home loan. It helps one to pay a smaller amount of interest and also get rid of the debt much earlier.

Helps You Save Money on Interest: Making an early repayment on a home loan helps to incur little interest cost. This is because you will be reducing the principal loan amount, which means that you will be paying less interest. 
 

Conclusion

Mortgage loan EMI calculator and Home loan prepayment calculator are both financial tools that are useful while planning your home loan. With the help of these calculators, you can easily make the financial planning and choose the most suitable variant of a loan with the lowest possible interest rate.