Purchasing a house is an impressive milestone in a person’s life, and it offers a sense of security to the buyer. Since the cost of real estate is increasing day by day, it is somewhat challenging for an individual to buy a property through a one-time payment. One of the effective ways to finance a house purchase is to avail a home loan.
If you wish to avail a 15 lakh home loan and are wondering about the expenses related to it, then read below to know how EMI on home loan functions!
You can use a home loan of Rs. 15 lakh to purchase an apartment or a house. You can also construct a building in a plot using a loan. Besides, the funds can facilitate the repair, extension or renovation of an old house.
Several private banks, public banks and financial institutions provide house loans to purchase residential property. Read the next section to understand the payment procedure!
EMI for home loans covers principal sum repayment and interest payables. A longer repayment period reduces the EMI amount. With subsequent payments, the interest amount falls and the principal amount rises.
The formula for computing EMI is as follows:
E = P x r x (1 + r) ^n ÷ [(1 + r) ^n – 1]
Now, E = EMI, P = principal repayment amount, n = repayment period in months, r = interest rate each month. Here r is calculated in the following way = (per annum interest rate/ 12) x 100).
Manual EMI calculation can be time-consuming and arduous. You can take the help of an online home loan EMI calculator to avoid mistakes.
Also Read: What Is a Small Personal Loan?
An online EMI calculator can be a highly beneficial tool for prospective home loan applicants. Let’s see how it will benefit you:
The following pointers will determine your EMI amounts for a loan of Rs. 15 lakh:
Navi provides a user-friendly EMI calculator to assist home loan applicants. You can enter the annual interest rate, tenure and loan amount in the Navi calculator to get accurate results. This entity offers a home loan of Rs. 15 lakh at attractive interest rates.
You can opt for a house loan of up to Rs. 10 crores and repay the amount for up to 30 years. Navi also facilitates top-up loans and balance transfers at affordable rates. You can send a loan application online via Navi App.
Also Read: How Does GST On Personal Loans Work?
A chart below showcases house loan EMI amounts for Rs. 15 lakh against different loan periods. The calculation applies a fixed interest rate of 6.9%.
|Repayment Tenure||EMI (Rs.)|
Various banks and financial organisations offer competitive interest rates for home loans. The list below highlights a few of them:
|Institutions/Banks||Starting Annual Interest Rates|
|PNB Housing Finance||6.99%|
|Karur Vysya Bank||7.20%|
|Standard Chartered Bank||7.99%|
*Interest rates as of January 20, 2022
Financial entities make a 15 lakh home loan affordable through their reasonable interest rates and monthly instalments. Based on the requirement, you can choose between fixed and floating lending rates. So keep an EMI calculator handy while diving for a loan.
Ans: A fixed lending rate remains the same across the repayment period. It ensures that you can compute the loan cost and interest rates before opting for a home loan. It is suitable in situations when the lending rate tends to rise during the coming years.
Ans: Floating interest rates keep changing over the loan tenure. Such rates fall or rise depending on the benchmark rate. They are ideal when market fluctuations bring about a downward movement in lending rates.
Ans: The financial profile of a consumer determines a lender’s risk margin. Financial entities prefer individuals who are:
Self-employed with high credit scores and stable incomes
Salaried employees of reputed companies
They offer attractive interest rates to such applicants as they involve limited risk.
Ans: Loans in which there are higher EMIs during the initial years and lower instalment amounts during the end are known as step-down. Conversely, a loan that engages lower instalment sums at the starting years and higher EMIs towards the end is called step-up.
Ans: Often, some home loan customers shift their outstanding repayment amount to a different lender who offers a comparatively lower rate of interest. This is known as the balance transfer of a loan. The lender will levy a charge for loan transfer.
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