A mortgage loan offers a borrower substantial funds that need to be paid within a given tenor, just like any other credit instrument. Individuals acquiring this credit must be responsible for its repayment so that their credit history does not get affected. Using a mortgage loan calculator can prove highly helpful for this matter.
The details in this article illustrate how a mortgage loan calculator helps plan out EMI repayments efficiently.
How does a mortgage loan calculator help plan out finances?
The formula for calculating mortgage loan EMI is:
EMI = [P x R x (1+R) ^N]/[(1+R) ^N-1]
P refers to the principal loan amount that an individual borrows
R denotes applicable mortgage loan rate
N stands for loan tenor or number of payable EMIs
A mortgage loan calculator is a user-friendly financial tool that uses the aforementioned formula and instantly calculates mortgage loan EMIs.Knowing the payable equated monthly instalments beforehand helps individuals plan out their finances.
How to use a mortgage loan calculator?
A mortgage loan EMI calculator is readily available on the website of any financial institution. In order to instantly calculate EMIs via a mortgage loan calculator, individuals must follow the following steps:
Step 1: Enter loan amount
Input principal amount in the calculator. For a loan against property, this amount depends on the current market value of the pledged property. Also, the equated monthly instalments will go high with an increase in the principal amount.
Step 2: Input loan tenor
Enter an ideal tenor of your loan against property either in months or years in the calculator. The longer the tenor, the lower will be the payable EMIs.
Step 3: Choose interest rate
Input the LAP interest rate in the calculator. There are several factors that affect the interest rate for LAP, including a borrower’s credit score and profile. If the interest rate is high, paying off the acquired credit will be challenging. Therefore, individuals must thoroughly research different lenders and opt for a reputed one offering the most suitable interest rate.
Choosing a renowned financial institution will also allow borrowers to benefit from several pre-approved offers that are extended on both secured and unsecured financial products. These offers help simplify and accelerate the lending process. Individuals can check their pre-approved offer by providing a few details, such as their name and contact number.
Benefits of loan calculator
Prospective mortgage loan borrowers must use a mortgage loan calculator because of the following benefits:
- Helps saving time
Manually calculating the equated monthly instalments of a mortgage loan using this formula is complicated. Using an online LAP calculator helps determine the EMIs within a few minutes.
Manual calculation of EMIs for a LAP is a lengthy and complicated process that offers opportunities for miscalculations. Using this tool will allow individuals to know the accurate value of the payable EMIs.
- Helps draw a comparison between multiple deals
Since a mortgage loan calculator helps determine the EMI beforehand, applicants can use it to compare loan offerings across multiple financial institutions. This will, in turn, allow them to select the most suitable loan option.
- Free of cost
An online loan against property calculator allows applicants to compute payable EMIs against no additional charges. Moreover, individuals can use it as many times as they want to.
It is evident from the details mentioned above that a mortgage loan calculator helps manage finances and loan repayment efficiently. Therefore, applicants must ensure that they use this tool prior to applying.
Additional Read: Important Things to Know About Gold Loan Documents to Avail Quick Gold Loan