Are you at a point in life where you are ready to buy the house of your dreams? Is your exhilaration about this realisation coupled with anxiety about home loan EMIs? If your hesitation stems from the fear of being unable to meet monthly EMI payments, there is a simple solution – a home loan EMI calculator! Such a calculator will remove all uncertainty surrounding the breakup of the interest and principal amounts.

Here are the top 5 things to know about an EMI calculator.

## 1. Allows you to plan ahead

A housing loan EMI calculator will tell you everything about your home loan, allowing you to make an informed decision. All you need to feed into the calculator is the amount that you want to borrow, the interest rate and the tenure (the period over which you would like to repay). The calculator will then calculate the total EMI amount, the monthly instalment, as well as the principal amount and interest breakup for you.

## 2. EMI calculation formula

The calculator uses one simple formula to calculate your home loan EMI:

Equated Monthly Instalment= [P x R x (1 + R) N] / [(1+R) N – 1]

Here,

P is the Principal Amount (The amount you are borrowing);

R is the Rate of Interest charged by the bank;

And N is the Tenure.

## 3. Amortisation schedule

Every month a part of your EMI gets credited to the principal amount to be repaid and the rest to the interest amount to be paid. Hence, even though the EMI more or less remains constant throughout the tenure, the amount contributed to both the respective balances (principal and interest) can vary. An EMI calculator shows you the amortisation schedule which reflects this breakup of your EMI along with the principal amount and interest balance on a half-yearly or a yearly basis. Thus, the entire payment schedule is transparent and available for your understanding at the click of a button.

## 4. Prepayment

If you feel that you can make a prepayment, but are unsure of the impact that it would make on your EMI, the calculator can help you ascertain the same. All you have to do is specify if you would like to make a prepayment and your EMI will be calculated accordingly.

## 5. Helps you understand options

You no longer have to go through the hassle of calling an agent or going to the bank just to know your options while taking a loan. You can feed in different combinations of the principal amount, home loan interest rate and tenure and see what works the best for you. The best part – it’s free and you can do this as many times until you are sure about the loan.

Head over to Tata Capital today for a free home loan EMI calculator and determine the best loan product for yourself. Explore a range of loan options and start inching towards your dream home!

Disclaimer: