Owning a home is the pinnacle of life's achievements for most people. In the early days, it used to be a near-impossible goal to reach. Today, in the era of flexible equated monthly installments (EMIs), achieving this goal is much simpler.
However, these EMIs are a double-edged sword. On the one hand, you get an easy way of paying back your housing loan, but on the other hand, you may get overwhelmed by this monthly payment that you have to pay every month. And this is true even for the best PNB home loan in India.
EMIs give you the luxury of paying back your loan amount in comfortable installments over several years. The repayment period (the tenor) will determine the amount you pay as EMIs each month.
Once your loan gets sanctioned, your lender will issue an amortization schedule. This schedule gives you information on the amount of the EMI and a year-wise breakup of your balance loan amounts.
Calculation of EMI
The calculation for a home loan EMI is complex, and we use many variables to arrive at the final figure.
The main determining factors of an EMI are the principal, interest, and tenure of the loan. The dominant component of the EMI is the interest due to the high value of the principal. The interest reduces as the loan gradually gets paid off.
The EMI uses these variables, but the value of the EMI remains constant at all times.
Formula for EMI
The formula that lenders use to derive the EMI of a home loan is as follows:
E = [P x R x (1+R) N]/[(1+R) N-1]
E = EMI
P = Principal amount
R = Monthly interest
T = Tenure
N = Number of months
So, for example, a loan for 20 lakhs at 7.5% per annum and a tenure of 240 months (20 years) would generate an EMI of:
EMI = (20,00,000 x 0.00604) [(1+0.00604) 240/ (1+.00604) 240-1] = INR 16,112 per month.
(Where R = (7.25/100)/12 = 0.00604)
Benefits of Home Loan Calculators
Even for the most adept people, calculating the EMI of a home loan using the above formula can be quite overwhelming. But knowing how to calculate your EMI by changing the variables can help you get the best deal and most suitable home loan in India.
You check the different EMIs by varying the numbers in seconds with a home loan calculator.
Calculate Your EMI
You can get the exact EMI in seconds by using the PNB home loan calculator. It puts the affordability factor in a better perspective. By changing the numbers, you can arrive at an EMI that suits your budget.
For example, increasing the tenure to the maximum limit can considerably reduce your EMI.
See Your Interest
You might be interested to see the extra amount you will be paying over and above the principal (interest). EMI calculators give you that figure.
An EMI home loan calculator helps you compare loans offered by different lenders.
Plan Your Tenure
You can see how the EMI differs according to different tenures. It is a great facility for long-term financial planning. If, for example, you can pay higher EMIs, then you can choose a shorter tenure and finish your loan sooner.
See Your Amortization Schedule
You can see the breakdown of both components of our loan, which gives you a clear picture of how your interest reduces and the principal increases. Although lenders provide this information, a housing loan calculator gives you access to it at all times.
Using the PNB Housing Loan EMI Calculator
PNB Housing Ltd brings you a convenient EMI calculator. Using this handy tool, you can get all the information about your housing loan even before it gets sanctioned. Here are the steps to use the PNB housing loan EMI calculator:
- Enter the principal amount
- Key in your chosen tenure
- Add the interest amount in the relevant field
Once you enter these three variables, you get the figure of the EMI you will have to pay each month. The beauty of this calculator is that you can add different permutations and combinations to find a housing loan that is best suited to your requirements.
PNB Housing Ltd provides you with all the tools to make your dreams come true with a housing loan from them. Using the PNB home loan online EMI calculator puts things in perspective. It makes applying for a loan and getting it approved an easy and stress-free experience.