Having a home of your own is an enormous achievement and an important life milestone. A space that is designed to meet your needs and reflects your sensibilities is a dream come true. These days, you can create the home of your choice by opting for a Home Loan to supplement your budget. While the loan amount offered can make the process of building your own living space easier, you can repay the amount with easy EMI options. For guidance on Housing Loan EMIs, continue reading.
What is Housing Loan EMI?
Equated Monthly Instalments, or EMIs, refer to monthly payments that are due to a bank or financial institution to return the loan amount borrowed. EMIs are considered to be an easier way of repaying loans in smaller amounts across a period of time which can stretch up to 30 years. Generally, the Home Loan EMI amount is divided into two components – the amount due towards the interest and principal portions. Gaining a better understanding of EMI payments can help you pick the right Home Loan option and also plan your finances accordingly.
What are the benefits of a Home Loan EMI?
Repaying your Home Loan via EMI payments can help you in the following ways:
- Assists in planning the loan amount: Once you calculate the EMIs due on your Home Loan, you can see if the amount fits within your monthly budget. You can adjust the amount you want to borrow according to your monthly repayment capabilities.
- Helps fix a proper repayment schedule: Knowing the EMI amount and the interest rate can help you adjust the tenure of the Home Loan to plan your repayment accordingly. You can also plan your monthly finances to ensure that the EMI amount is repaid on time.
- Helps plan prepayment: You can save the amount spent on paying off interest by making sure you repay the loan as soon as possible. To that end, knowing the EMI amounts due before applying for a Home Loan can help your plan for prepayment through careful saving and investment.
How to calculate Home Loan EMI?
Now that you know what is EMI Home Loan, you can learn more about calculating the amount due. To calculate Home Loan EMI, you must keep in mind that the amount due is directly proportional to the loan amount borrowed and the interest rate. However, it is inversely proportional to the tenure of the loan. Thus, EMI amounts increase with higher loan amounts and interest rates but decrease over longer tenures.
You can easily calculate EMI manually by relying on the variables mentioned above. The formula for the same is:
EMI = [P x R x (1+R) ^ N]/[{(1+R) ^ N}-1]
Wherein P is the Principal Loan Amount, R is the monthly rate of interest, and N is the loan duration in months.
However, to make your life easier, you can count on free Home Loan EMI Calculators available online. You can simply enter details regarding the loan amount, interest, and tenure, to get an accurate figure within seconds.
To more about how you can efficiently repay your Home Loan, you can read more about Home Loan amortization schedule here.
Home Loans at HDFC Bank
HDFC Bank recognises the importance of owning your space and provides Home Loans to help you purchase your dream home. HDFC Bank offers Home Loans at attractive interest rates with added benefits and speedy disbursal. You can repay the HDFC Bank Home Loan amount with easy EMI facilities and lighten your financial burden.
Click right here to apply for an HDFC Bank Home Loans now.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Home Loan at the sole discretion of HDFC Bank limited. Loan disbursal is subject to documentation and verification as per Banks requirement.