A certain amount of money borrowed from a bank or a financial institution to purchase a house is known as ‘Home Loan’. In this era, buying a house or any other property is difficult as the prices of these things are almost touching the sky. It is almost impossible to pay such a huge amount of money instantly. So, banks provide us with home loans to make buying and selling of property easier for us.
Generally, people take a home loan to buy a house or a plot of land. But they are also taken for construction of a house, remodeling & renovation or repairing of the existing property. In home loans, the house is mortgaged to the lender as a security till the repayment of the loan. The home loans are mostly repaid in the form of EMIs.
Housing Development and Finance Corporation Limited (HDFC) is one of the finest Indian financial institutions in the private sector. HDFC has an existence in banking as well as life and general insurance, asset management, venture capital, realty, education, deposits.
What is a home loan EMI?
EMI is short for Equated Monthly Installments. EMI contains a repayment of the principal amount and payment of the interest on the residual loan amount. Thus, it is a fixed amount paid by a borrower to a lender at a specific date each month. EMI amount can increase or decrease due to the tenure (maximum for 30 years.)
How to calculate EMI?
The basic formula to calculate EMI is:
E= P x R x (1+r)n/[(1+r)n-1]
- E is the certain EMI amount which should be paid monthly.
- P is the definite Principal amount which is borrowed.
- r is the rate of interest.
This formula is universally used to calculate EMI. But, due to its multiple calculations, one can get confused and end up making a lot of mistakes in the total of the EMI.
EMI calculators are used to avoiding the errors and find the correct EMI amount. HDFC’s home loan EMI calculator gives us an estimated amount for the total monthly installment payments.
Why should we use calculators?
HDFC’s Home Loan EMI calculator gives us a clear-cut understanding of the amount that must be paid for the EMIs. EMI calculators help us to figure out the loan amount which can be borrowed and helps in measuring the contribution to be made by us and the price of the property. So, it is important to know the EMI amount to calculate the home loan eligibility.
How to use HDFC EMI calculators?
We just need to input the following information to calculate EMI-
- Loan Amount: Input the anticipated loan amount that you want to borrow,
- Loan Tenure (In Years): Input the desired loan time-period in which you want to avail the housing loan.
- Interest Rate (% P.A.): the Input interest rate.
Then, click on the calculate tab or button to know the EMI amount.
*Note – Even though the EMI calculation is accurate, it is still an approximation.
Benefits Of Using an HDFC EMI calculator :
Using a calculator is more convenient than performing manual calculations as it gives us results faster by just a click of a mouse.
- Accuracy –
The chances of making errors or mistakes are more in manual calculations while the calculator gives us accurate or precise results.
- Amortisation table –
The table will show us how the loan will progress over some time.
- Graphic depiction–
The online EMI calculators provide us with a pictorial presentation of every data point like principal outstanding, time remaining, rate of interest, etc.
Nowadays people prefer HDFC over other private and nationalized bank as it gives latest internet banking facilities with user-friendly interfaces which facilitate instant EMI payments online without any add on charges and provides EMI calculators which help the borrower to plan his spending’s.