Many people feel that when it comes to loans, terms like EMI, interest rates, loan tenures, etc. are incomprehensible things. It’s like a black box where they don’t have any idea how EMI is calculated, on what factors it depends, etc.

But if you are a prospective buyer, you should be aware of certain loan basics. This will help you discuss about the key points with various lenders. And mind you, this understanding can actually help you save a lot of money if you gain this knowledge and use it to negotiate better with your lenders.

One tool that can help you increase your understanding about home loan dynamics is home loan EMI calculator. It takes following 3 inputs for the user:

  • Loan amount
  • Loan tenure
  • Interest rate

And in result, it shows the EMI that the borrower will have to pay for the given combination of inputs. That is not all. The calculator also tells you the total interest that you will be paying over the full tenure of the loan. So it gives you the complete picture.

For example, if you give inputs as Rs 50 lac loan, for 20-year tenure and 9% interest, the calculator will show you following results:

  • Monthly EMI is Rs 44,986
  • Total interest payable will be Rs 57 lac

So as you can see, using an online calculator is extremely easy and it can help you get the basic idea of the expected loan EMI for your requirement. If you want to better understand how your EMI will change due to changes in various factors, you can play around with the calculator (by changing interest rate, loan tenures, etc.).

Once you do that you will realize that as loan tenure increase, EMI decreases by total interest increases. On the other hand when you decrease the interest rate or the home loan amount, it will reduce the EMI and as decrease the total interest paid.