Top Reasons To Use An EMI Calculator Before Getting A Home Loan

An EMI calculator is one of the most useful tools available free of cost for customers. Financial institutions encourage their borrowers to make use of the home loan calculators so as to ensure that no defaults occur in the repayment of the EMIs each month. Reasons why one must use an EMI calculator before applying for a home loan are:

Choosing the right financial institution

There are a number of financial institutions which offer home loans at a variety of interest rates. Using an EMI calculator helps individuals decide which institution will provide the loan amount of their choice with a tenure and interest rate which is affordable. It is crucial for one to choose the right place to apply for a home loan. Choosing the most affordable home loan eases the financial burden the borrower will have to deal with in the later stages.

Plan finances

Before applying for a home loan the reason why one must opt to use an EMI calculator is to find out how much they will be required to pay each month as EMI. This knowledge helps the borrower plan in advance how to repay the loan and not default on any payments. In the case of individuals who have opted for a floating interest rate, this calculator is still beneficial. One can calculate in advance a positive and negative EMI based on varying interest rates. This helps decide whether one should opt for a floating or fixed rate of interest on their home loan.

Predict when to prepay the loan

Selecting the tenure is crucial for an individual. Too long and the burden to repay the long will be suffered longer, too short and the EMIs charged each month will be higher. In such a scenario, the home loan EMI calculator helps the borrower decide the ideal tenure which will give him the monthly EMI of his choice. The tool can also be used to decide a tenure which allows the individual to prepay their loan amount without having to suffer any extra interest charges. This is possible since the calculator not only calculates the EMI but also shows the amount of interest and principal loan amount which is being paid each month by the borrowers.

The EMI calculator tool has a number of benefits for the borrower. All individuals must use this tool to ensure that they get the loan amount of their choice at an affordable rate. It also helps prevent any defaults in payment and hence is an ideal tool to be used by all.