How To Get Rs. 10 Lakh Home Loan: EMI Calculator & Interest Rate

The Central Government’s Digital India initiative and reduction in interest rates have contributed significantly to the growth of the home loan sector. According to recent reports, the affordable housing loan segment witnessed a growth of nearly 8% between FY20 and FY21. 

However, it has also been noticed that the small-ticket loan segment, for instance, Rs. 10 lakh home loans have the highest delinquency rate. To curtail such issues in future, the first step will be to assess your monthly obligations using an EMI calculator. 

This article reflects on the usage and benefits of EMI calculator for Rs.10 lakh home loan.

Also read: How To Choose Banks/NBFCs For Home Loans?

Benefits of an EMI calculator for Rs. 10 Lakh Home Loan 

It is necessary to have a proper repayment strategy before you get yourself into long-term commitments like a home loan. In that regard, it is essential to evaluate your EMIs. Even though you can calculate your monthly obligations manually, the financial tool remains more advantageous. Here are some reasons why:

• Fast and user-friendly 

In order to evaluate your equated monthly instalment for an Rs. 10 lakh home loan, you need to provide certain values first. With an EMI calculator, you just need to enter these values starting from the principal amount first. Apart from that, you also need to provide the rate of interest your current lender is charging and the number of years you are given to repay the home loan. 

• Convenient for comparisons 

When you are applying for a home loan, it is expected that you will need to compare different combinations of loan amount and repayment tenure. This helps in deciding how much you will be able to bear for that specified period. Since this particular financial tool is free to use, you can compare different combinations of principal amount and tenure as many times as you want. You get the results almost instantly, enabling you to make a decision quickly. 

• Availability of loan amortisation schedule 

Apart from the monthly instalment amount, this financial tool also provides a loan amortisation schedule. It consists of the breakup of the principal component and interest of your loan. This allows you to understand how much of a specific month’s EMI is going towards the interest payment and principal repayment. 

Additionally, one of the key benefits you get while using an EMI calculator is accuracy. Despite providing instant results, such financial tools ensure that the calculated EMI amount is error-free. 

Also read: Why You Should Always Compare Home Loan Interest Rates?

How Does an EMI Calculator Work? 

The EMI formula used in the calculation is —

EMI = P x R x (1+R)^N / [(1+R)^N-1]

In this formula, the key components are:

• P = Principal amount
• R = Rate of interest
• N = Loan repayment tenure (in months or years) 

Using this formula, if you assume that a person is availing a Rs. 10 lakh home loan for 12 years at 6.7% interest rate, the EMI components will be:

• P = 10,00,000
• R = 6.70/12 = 0.55
• N = 144 months 

Now, the EMI calculation will be —

EMI = 1000000 x 0.55 x (1+0.55)^144 / [(1+0.55)^144-1] = Rs. 10,125 

Factors Affecting Rs. 10 Lakh Home Loan EMIs 

Apart from the key components of the EMI calculation, i.e. principal amount, interest rate and loan tenure, there are certain factors that influence this value. Let’s check them out.

• Down payment: This amount is basically what you pay from your own pocket while purchasing a property. The larger this amount is, the lesser will be the principal amount of your home loan. This will automatically influence your home loan EMI. 
• Prepayment: When you prepay a considerable portion of your loan, the principal outstanding gets reduced with that. This inevitably decreases your equated monthly installment amount. However, you also need to look out for the charges associated with this prepayment feature. 

In order to make sure you are able to manage your monthly liabilities properly, it is advisable to compare different lenders and choose one offering the lowest interest rate. Navi provides home loans of up to Rs. 10 crore with interest rates starting from 6.46% p.a. only. To avail a home loan, download the Navi app now!

How to Use Navi’s EMI Calculator for Rs. 10 Lakh Home Loan 

Follow these steps to use Navi’s interest calculator and get the EMI value of a Rs. 10 lakh home loan:

Step 1: Visit the online portal of Navi and choose ‘home loan’ from the tab.

Step 2: Now, you need to click on the ‘EMI calculator’ option.   

Step 3: Here, you need to provide the necessary values to calculate your equated monthly installment amount. Make sure you are entering accurate inputs. 

Step 4: After providing these values, click on ‘Submit’ to get the exact EMI result. 

10 Lakh Home Loan EMI Calculations

To make it easier for you, here’s how to calculate Rs.10 lakh home loan EMI for 5 years, 10 years, 15 years and 20 years. For this example, we have considered the Navi home loan interest rate of 6.46% p.a. with zero processing fee.

To help you get a better understanding of EMI calculations, some examples are provided below. Here, the repayment tenure will differ while the principal amount and interest rate will remain unchanged.

Amount	Tenure	Interest Rate*	EMI
Rs.10 lakh	5	6.46% p.a.	Rs.19,547
Rs.10 lakh	10	6.46% p.a.	Rs.11,334
Rs.10 lakh	15	6.46% p.a.	Rs.8,689
Rs.10 lakh	20	6.46% p.a.	Rs.7,432

* Note that this is for illustrative purposes only.

Final Word 

A clear understanding of the amount you will have to pay every month for a specified period of time helps in managing your finances better. Based on that, you will be deciding the loan amount to avoid a debt trap. 

Even for small-ticket credit facilities, like a Rs. 10 lakh home loan, assessing EMI is necessary for better financial planning. With an EMI calculator, the process of making a decision and planning the repayment becomes much easier. 

Frequently Asked Questions 

1. I have availed a home loan at a floating rate of interest. Will my EMI change every month?

In the case of home loans with a floating interest rate, the EMIs change depending on the market situation. This means whenever the home loan interest rates change due to the changing nature of the market, it automatically influences the EMI value. 

2. How can I reduce the tax burden by paying my home loan EMI?

The Government of India extends several tax benefits on home loans in order to help citizens reduce their tax obligations. For instance, u/s 80C of IT Act, 1961, individuals availing home loans get to claim a deduction of up to Rs. 1.5 lakh. Note that this will be available on the principal amount only. Other than that, Section 24b of the IT Act also allows home loan borrowers to claim a tax deduction of up to Rs. 2 lakh on the interest payment.   

3. What do you understand about home loan pre-EMI?

Some financiers follow a specific norm; they disburse the total loan amount in stages. In such cases, home loan borrowers need to start paying the equated monthly instalments only after getting the full amount disbursed. Till then, they only have to pay the interest applicable on amounts that have been disbursed. This can be referred to as pre-EMI. 

4. If I miss paying my EMIs in a specific month, will my credit score get affected?

Missed EMI payments definitely make a negative impact on borrowers’ credit profiles. In order to ensure that you do not fail to pay your EMI on the specified date of each month, assess your EMI obligations beforehand and plan accordingly. 

5. Where can I find the home loan EMI calculator tool? 

Almost all financiers have the home loan EMI calculator tool available on their websites. You can simply visit the online portal of your preferred lender and use this financial tool from there to compute the EMIs.

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