Are you planning to avail Rs. 60 lakh home loan?
Before looking for financiers who offer the loan amount at low interest rates, there are some additional things you must know.
Financial institutions in India saw a significant rise in home loan delinquencies. Top housing finance companies had to face around 7.84% delinquency in Q3FY21.
To avoid further risks, especially in the case of high-value home loans, lenders are suggesting borrowers assess their EMIs beforehand. Are you wondering what will be your first step before opting for a housing loan? Let us help you with that!
When you are planning to avail Rs. 60 lakh home loan or a larger amount than that, you must have a solid repayment strategy to avoid falling into a debt trap. Considering the substantial increase in loan defaults, it is advisable that you evaluate your monthly instalment obligations before applying for a particular loan amount.
These days, most home loan providers offer online tools like an EMI calculator, which comes in handy when you want to avoid manually calculating your equated monthly instalments. Especially when you are comparing multiple combinations of loan amount and repayment tenure, manual calculation is not an ideal option.
With an online interest calculator, you can expect fast assessments and additional benefits. Refer to the following section to know all the advantages it comes with.
Apart from fast calculations, here are some additional benefits of using an EMI calculator to assess monthly instalments:
When you are getting into long-term commitments like home loans, it is essential to be aware of your fixed monthly obligations beforehand. This basically helps to plan your finances better and handle these liabilities smoothly.
You cannot afford erroneous calculations of your EMI as that automatically hampers your overall financial planning. An EMI calculator ensures accuracy and provides the results immediately.
As mentioned before, you can get these tools almost on every financial website. You just need to visit the online portal of your preferred lender and use the EMI calculator to assess EMIs. The process requires you to provide a few inputs to get the result instantly. Since these devices are mobile-friendly, you can use them anytime from any place.
Convenient for making comparisons
When you are planning to avail Rs. 60 lakh home loan, it is expected that you will look for the lowest interest rate to make your EMIs affordable. For that, you need to compare different financiers and check the rate of interest they are offering. Using this online tool, it becomes easier to make such comparisons.
Now that you are aware of its advantages, it is vital to understand how this financial tool works.
The manual calculation is bound to get taxing, especially if you have multiple combinations of repayment tenure and loan amount to compare. However, an EMI calculator simply requires you to enter the values or use the slider to adjust the values for getting an instant result.
Since the discussion revolves around home loan EMIs, you should also learn about the aspects that generally affect them. Following are some factors:
You will notice some financial institutions offering both floating and fixed interest rates. Any kind of change in these rates will automatically influence your loan EMIs either positively or negatively. These changes may include RBI’s certain decisions regarding repo rate, which generally make a significant impact on loans with floating interest rates. In case of a repo rate cut, the interest rates inevitably come down, making the EMIs much more affordable.
While the traditional repayment option is there, borrowers can also go for part-payment or prepayment options. Note that your home loan EMI will be affected by the mode of repayment you choose. For instance, if you avail Rs. 60 lakh home loan and decide to prepay it before the allotted tenure, the principal amount will be reduced, further lowering your EMI.
However, make sure to go through the clauses before availing the loan as some financiers impose charges for choosing this prepayment option.
Apart from the loan amount, borrowers also need to decide on the repayment tenure wisely. Going for a longer tenure generally helps in reducing the monthly instalment amount. Reputed financiers like Navi offer instant home loans up to Rs. 5 crore and the facility of choosing a repayment tenure up to 25 years. This automatically makes your home loan EMIs affordable, especially since the interest rate starts from 7.39% p.a.
For more information, download the Navi app and obtain funds for your dream home! Moreover, look out for these aspects and be aware of your monthly obligations so that managing them does not get challenging after a point.
To use the home loan EMI calculator, you need to enter the following components:
Instantly, you will find the exact home loan EMI value, which will help you plan your finances further.
Find the tabular representation of home loan interest rates offered by top financial institutions in India:
|Lending Institutions||Interest Rates Starting From (per annum)|
|Navi Home Loans||7.39% onwards|
|Kotak Mahindra Bank||7.50% onwards|
|Axis Bank||7.60% onwards|
|Yes Bank||8.95% onwards|
|ICICI Bank||7.60% onwards|
|HDFC Bank||7.55% onwards|
|Bank of Baroda||7.45% onwards|
|Bank of India||7.40% onwards|
|LIC Housing Finance||7.50% onwards|
|Federal Bank||8.55% onwards|
|Union Bank of India||7.40% onwards|
|Reliance Home Finance||9.75% onwards|
To help you understand these calculations better, here are the EMIs for Rs. 60 lakh home loan with different tenures:
You can see that the home loan instalment amount differs depending on the repayment tenure. Using Navi’s home loan EMI calculator, comparing these different combinations will be easier.
Before availing a substantial loan amount, it is necessary to be aware of your fixed monthly obligations so that you can plan your finances accordingly. This is crucial, especially for long-term commitments, for instance, when you avail Rs. 60 lakh home loan. By calculating your EMIs beforehand, you will be prepared for emergency situations.
Yes, a down payment is one of the essential factors influencing the equated monthly instalment amount. In case you decide to pay a large amount as a down payment, your loan amount will automatically come down. This will further decrease your home loan EMI.
When you are applying for a home loan and obtaining a large sum for a certain period of time, you are getting yourself into a long-term commitment. In order to keep your credit profile clean, it is necessary to pay your EMIs on time. Being aware of the monthly instalment amount beforehand helps you to plan your finances better, and the chances of missing or making late payments get reduced as well.
The mathematical formula used for EMI calculation is given below:
EMI Amount = [P x R x (1+R)^N]/[(1+R)^N-1]
Here, P signifies principal amount, N stands for repayment tenure, and R denotes the interest rate financial institutions are offering.
Opting for a home loan balance transfer to switch to a different lender generally reduces the equated monthly instalment amount. This happens because you go for a lower interest rate while refinancing your home loan. However, in such cases, borrowers also need to look out for the balance transfer fee.
Before you go…
Are you looking to buy that house you’ve been eyeing 🏠 and you need a loan of up to ₹10 crore. Install the Navi app now and get instant in-principle approval right away! Interest rates starting at 7.39% p.a.
Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.