Purchasing a home is everyone’s dream. Every individual wishes to buy his or her perfect home that can allow them and their family to live a happy life together .However, buying a home can be a costly affair due to rising home prices and inflation.
Home loans may come to the rescue in such cases, but a rise in interest rates can eradicate the advantageous purpose behind availing a home loan.
A recent hike in the home loan interest rates by SBI poses a detrimental effect on home buyers as a large portion of the repayment amount will go towards interest payments. This makes understanding of home loan interest payments and working on an EMI calculator essential.
A home loan interest calculator serves as an online tool for calculating and arriving at the EMI, i.e., equated monthly instalments necessary for repayment of home loan.
A hike in home loan interest rates can lead to an increase in repayment amount. The EMI increases make taking a home loan more expensive.
A home loan EMI calculator can help in calculating and reducing this burden to a great extent. Let us understand this by an example.
The impact of a hike in home loan interest rates can be easily understood, and necessary remedial action can be taken for the same through the use of a home loan EMI calculator.
Suppose a home loan of principal amount Rs 20 lakhs has been taken by a salaried individual for the tenure of 5 years i.e., 60 months. The interest rate of 6.5% p.a. results in an EMI amount of Rs 39,132.
The EMI amount is required to be paid over 60 months, leading to a total repayment amount of Rs 23,47,938, out of which Rs 3,47,938 is the amount of interest to be paid.
By expanding the above example and taking in the hiked home loan interest rate of 7%, the total interest payments increase to Rs 3,76,144. With an increase of 0.5% in interest rate, the total interest payments increase by Rs 28,206. The new EMI amount arrives at Rs 39,602.
This hike in home loan interest rate makes a home loan quite expensive for a simple salaried individual. However, through the use of a home loan EMI calculator, one can reduce this burden to a great extent.
Prepayment of the home loan amount can also help in reducing the burden of a hike in the interest rates. By taking the above example, at the end of 36 months i.e., 3 years, the outstanding amount of repayment arrives at Rs 8,84,523.
A surplus amount of 2,84,523 can be used for the prepayment of the remaining loan amount. This helps in bringing down further the loan repayment amount, including interest. The EMI for the remaining loan amount decreases to Rs 11,881.
A home loan EMI calculator as made available by Money View can help in calculating the correct amount of EMI.
Also, the company makes available hassle-free home loans and delivers a paperless method of completing the procedure loan application. Salaried individuals can obtain a home loan with ease and without any requirement for collateral.
The best services combined with the delivery of support services make them one of the best personal loan service providers.
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