Mortgaged loans provide a high-value credit against a property kept as collateral. Nevertheless, this type of loan makes individuals involved in a financial obligation for the long term. Therefore, borrowers must be aware of the EMI amounts they have to pay in advance as It can help them do better financial planning and manage their debt better. In this regard, borrowers can use a mortgage loan calculator to accurately know their monthly payable amount for a specific loan tenor. However, they must understand how they can use this calculator.
Procedures to use the mortgage loan calculator
An online mortgage loan calculator helps individuals quickly understand their equated monthly instalments (EMIs). Nonetheless, before knowing the steps to use this calculator, learn about the inputs it requires:
- Loan amount
- Interest rate
After knowing these details, individuals need to follow the stepwise guidelines to know their EMI amounts:
Step 1: Visit the online portal of the respective financial institution and search out the mortgage loan calculator.
Step 2: Enter the inputs as mentioned above in the appropriate sections. However, individuals may also need to adjust the slider to enter the information in some calculators.
After completing these easy steps, individuals will know the EMI amount and total interest payable. Additionally, they can understand the total amount they will have to pay to their respective lenders till the end of their repayment period.
Apart from this online method, individuals can also find out their mortgaged loan EMIs manually by using the formula sated below.
- EMI amount = [P x R x (1+R) ^N] / [(1+R) ^N-1]
Here, P stands for a premium or the loan amount, R denotes the mortgage loan rate, and N indicates repayment tenor.
Even though EMI calculations can be done offline, using an online calculator comes with different advantages.
Advantages of mortgage loan calculator
Following are some of the essential benefits of using this EMI calculator for a mortgage loan:
A manual calculation of EMIs using the formula may take much time. So, individuals can use this calculator to save time. They just have to give the inputs accurately to know the monthly payable amount of their mortgaged loan, like a loan against property.
Individuals can make several errors while calculating mortgage loan EMIs manually because it involves long numbers and fractions. However, mortgage loan calculators are programmed to provide error-free results.
Intending borrowers can also get the amortisation schedule of their loan amount by using this calculator. This way, they can identify their payable interest and principal components at any specific period.
This way, intending borrowers can project their EMI amounts and loan tenor easily before getting a loan against property. It will help them stay prepared and determine their repayment plan. First, however, individuals need to be aware of the step-by-step guide to applying for a loan against property.
Individuals can get several advantages by availing of LAP. For example, they can use the borrowed amount for any purpose they wish for. Further, borrowers can decrease their taxable income under Section 24(B) of the Income Tax Act of India. So, it is important to know how they can avail of tax benefits on their loan against property.
Additionally, borrowers can fast-track their loan application process by leveraging pre-approved offers. Lending financiers provide this facility on financial products like LAPs, home loans, etc. Borrowers can quickly check their pre-approved offers by submitting their names and personal contact details.
In this way, individuals can utilise a mortgage loan calculator to understand the financial impact of their borrowings. Thus, it will help them do proper budgetary planning to manage their finances during the loan tenor.