# Best Way to Calculate Your Home Loan EMIs Online

Are you confused about how to calculate home loan EMI? Well! Worry not. We will help you understand how to compute your home loan EMI so you can compare it to what you’ve been paying. A monthly payment paid by a borrower to a lender on a predetermined date is known as an equivalent monthly instalment (EMI). The EMI is composed of two parts: principal and interest.

The bulk of the EMI is made up of interest in the early years, while most of the EMI comprises the principal amount towards the conclusion period. Getting a home loan is simple, however paying the monthly EMI is a challenge. The EMI calculation is essential not only for a house loan but for every loan you take out. You may figure out the amount to be spent on your house as EMI from the EMI calculator. Many people who work have fixed incomes, and they must carefully plan their monthly financial decisions.

## Home Loan EMI

• Principal Amount

The principal sum is the amount of money borrowed to acquire your property. The lender’s interest is applied to the principal amount, commonly known as the loan amount, and the total is divided into equal monthly instalments. The principal amount depends on the property’s worth and the sum which the loaner can pay.

• Tenure

Long-term loans, such as home loans, have payback terms of up to 20 or 30 years. Longer-term house mortgages offer lower monthly payments, but the interest paid by borrowers is higher.

• Interest Rate

People look for the lowest home loan interest rate, but monthly payments on home loans with variable interest rates might vary. Thus, interest on loans may be fixed or variable. When a loan has a fixed rate of interest, the EMI remains constant throughout the life of the loan.

• Down Payment

Financial institutions only lend a part of the property’s worth, allowing the borrowers to cover the remainder. Depending on the value of the property and eligibility of the loaner, the fraction of this amount may range from 75-90%. The remaining sum, referred to as a down payment, should be paid by the borrower.

## Here’s How to Calculate Home Loan EMI!

1. Calculation of EMI via formula

EMI = P x R x [{(1 + R)^N} / {1 – (1+R)^N}]

Here, P = Principal Amount

R = Rate of Interest

N = No. of months

R = [(Annual Rate/12)/100]

Assume you take out a Rs.70 lakh house loan with a percent interest rate and a 25-year repayment period. EMI may be calculated by the following method:

R = [(8/12)/100) = 0.0067

N = 300

EMI = P x R x [{(1 + R)^N} / {1 – (1+R)^N}]

= 70,00,000 x 0.0067 x [{(1 + 0.0067)^300}/{1 – (1+0.0067)^300}]

=70,00,000 x 0.0067 x [7.413/6.413]

=70,00,000 x 0.0067 x 1.156

=54,075.6

1. Calculation of EMI via Excel Sheet

The present value of payments (PMT) tool in Excel may be used to calculate your EMI. PMT is the formula for accomplishing this. One of the most straightforward approaches is to compute the EMI using an Excel spreadsheet. There are three variables required.

• The interest rate,
• The number of periods,
• The loan’s value.

Fill in the form providing the principal, the interest rate, and the period. Remember to include the currency symbol when entering the loan number, and when entering the rate of interest, remember to include the percent sign. You may mention tenure in terms of years in the formula. It is an easy and quick way to calculate EMI for any loan the loan takes.

1. Calculation via EMI calculator

Aside from nearly all banks, a variety of financial service companies offer free online home loan EMI calculator. This is most likely the most basic way for determining the EMI on a house loan.

IMPORTANT THINGS TO REMEMBER

• Pre EMI

Pre-EMI is a phrase used to refer to a loan taken out on a project that is still under construction. In this case, the loan is distributed in stages based on the number of instalment payments made to the developer.

• Credit Score

A customer should check his or her credit score before registering for a house loan. A strong credit score, preferably over 750, will assist you in obtaining a minimal interest loan.

• Prepayment

Instalment transfers are fees charged in a single sum to reduce the amount of money owed on your loan. When you make a partial payment, your principal is decreased even lower. Consequently, you can significantly lower the interest component of your loan by making periodic partial payments.

• Charges

Fees for registration, late payment penalty, and foreclosure charges must all be considered. It’s critical to iron out these issues with the lender as soon as possible.

• Loan Cover

You must get a loan cover term insurance plan that covers the entire amount of the loan. It is critical to conduct your research to obtain the most satisfactory home loan insurance around.

This is how you can calculate your home loan EMI online! As mentioned, there are multiple ways to do so. You can opt for the best suited for you.  Hope this information will help make your task easier.