Housing loan rates were slashed in October 2021, further fueling the demand for residential properties. A report claims that more than 20 financers are currently offering home loans below 7% interest per annum. With minimal liabilities, this could be the perfect time for individuals to fund their dream property purchase.
Nevertheless, using a home loan interest rate calculator is still crucial before deciding on one’s lender. In the long run, such tools can help borrowers plan their finances, which is integral for long-term liabilities like a home loan.
Understanding the basics of a home loan interest rate calculator
As the name suggests, this calculator is a specialised tool available online, which converts a quoted home loan interest rate into the actual interest amount a borrower is liable to pay. Generally, all reputed lenders offer such a tool on their websites, allowing for easier computation of one’s EMI’s and housing credit interest cost.
To calculate, individuals need to enter three specific details of their home loans. These are –
- Principal amount – Refers to the amount of credit availed as a home loan.
- Tenor – Tenor is the repayment period a borrower opts for when applying for the said loan. For housing loans, this can extend to 20 years.
- Interest rate per annum – Interest percentage one needs to bear each year is also mandatory when calculating EMIs and the total cost of a loan using a home loan interest rate calculator.
The housing loan EMI calculator has specific fields in which an individual must enter these three parameters. After doing so, clicking on calculate should display the desired results. There are several benefits of calculating EMIs before taking a home loan, some of which are listed below.
Advantages of using interest rate calculators
Borrowers should consider using such calculators for the following reasons –
- Choosing the best deal
Housing loan interest tends to differ from one lender to another. Choosing the best term available in the market involves calculating one’s liabilities from the rates quoted. These calculators provide a simple way of assessing whether the terms provided by an individual’s chosen lender is affordable for him/her.
- Help determine whether a balance transfer is ideal
Home loan balance transfer refers to shifting your existing principal outstanding from one lender to another, usually to take advantage of lower interest charges. However, housing loan balance transfer only leads to substantial savings if initiated at the right time of one’s repayment term.
A home loan EMI calculator is the simplest way to determine whether refinancing a housing credit would lead to considerable savings for the borrower. It would also show the new EMI that the borrower would be liable to pay after such a move.
- Simple interface and quick results
A home loan interest calculator provides accurate results almost instantly. Manual calculations, on the other hand, are complex and time-consuming. Even individuals who have never used such an online tool before can quickly understand the interface and start utilizing it.
Thus, such a calculator is indispensable when it comes to comparing the offers from various housing finance companies. Certain reputed companies provide pre-approved offers to eligible applicants to simplify the loan approval process. These offers are available on housing loans, loans against property, and more. You can check the pre-approved offer by submitting your name and contact information.
Utilizing a home loan interest rate calculator is the easiest way to judge whether such pre-approved offers prove beneficial for a borrower. Informed decision-making is crucial to avoid excessive financial strain during a home loan’s repayment tenor. Otherwise, borrowers may have to face an extensive burden throughout the considerable repayment term for such credits.