Amazing Features and Benefits of Using Home Loan EMI Calculator Online

 Nowadays, planning a home loan is possible in advance. It is because you can use the home loan EMI calculator online and indulge in efficient financial planning. 

When you are aware of an exact home loan EMI, you can manage your outlays to make way for it easily. 

Let’s know about the benefits of using the home loan EMI calculator online and the steps to using it!

What are the benefits of using the home loan EMI calculator online?

1. You have an idea of an exact home loan EMI

By using the house loan calculator for EMI computation, you can be sure-shot about the precise EMI amount. 

2. It helps you with an efficient financial planning 

When you have an idea of the exact loan EMI figure, you can plan your finances easily. 

3. It assists you in getting real-time results 

The result showcased by the home loan EMI calculator online is real-time and is error-free. 

How to use the home loan EMI calculator online?

1. Open the home loan EMI calculator tool on your preferred lender’s website. 

2. Choose your desired housing loan amount, the applicable rate of interest and the repayment tenor. 

3. Once done, the home loan EMI calculator online will display an actual home loan EMI payable over a tenor. 

4. You will also get to know about your precise home loan interest rates amount. 

5. The home loan EMI calculator online tool also displays your entire loan cost (principle + interest). 

With the home loan EMI calculator online in action, you don’t have to worry about scratching your head. It is because you can calculate your housing loan EMI amount manually. 

The home loan calculator for EMI measurement is available for free on the website of a lender. The home loan EMI calculator online facility is available round the clock. 

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Top Factors That Badly Affect Your Home Loan Interest Rates

One of the most prominent factors deciding your home loan affordability is the interest rate. It definitely does vary across lending institutions, depending on market conditions. However, many applicants might not be aware of how these rates can be negotiated depending on their property characteristics, eligibility, and financial habits. Here are some of the top factors affecting home loan interest rates and ways in which individuals can save on the same.

 

Poor employment history:

Most lending institutions mandate employment stability to gauge an applicant’s repayment capacity. Individuals with frequent job changes, low income, or poor business turnover are likely to incur high housing loan rates for security

Unimpressive credit history:

A 750+ CIBIL score and clean repayment history are ideal when availing housing loans. It also provides power to borrowers during negotiations for lower home loan interest rates. Additionally, you can enhance your credit score by restricting your credit limit usage to 30%.

 

Loan amount and tenor:

Generally, financial institutions charge high interest rates against very high or very low loan amounts and long tenor. Using a loan EMI calculator can help individuals determine an amount and tenor according to their affordable interest rates. 

 

Property value and location:

Properties located in areas with good connectivity, like extensive railway and road network, and close to hospitals, ATMs, airports, etc., have greater value. Lenders prefer investing in such properties with high resale value and generally offer lower home loan interest against them.

Down payment:

Larger the down payment you make, the lower will be the loan principal you acquire. Also, a down payment exceeding 20% of property price displays greater repayment capability and attracts lower interest rates.

Additionally, interest rates can also vary with their type: floating and fixed. Considering and improving upon these factors before applying for a home loan in India can help individuals avail considerable interest savings.

Lastly, do not forget to compare the rates offered by various housing finance companies. Depending on a lender, such rates can vary tremendously in some cases.

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Housing Loan Rates Hiked? Know How to Deal With Them Properly!

Home loans that carry a high credit value and an extended repayment tenure is a long-term interest commitment. The credit form imposes a considerable pressure on a borrower’s financial capacity. A hike in home loan interest rates can become challenging for an individual paying EMIs, especially for a floating interest housing loan.

For instance, if one avails Rs.25 lakh at a 10% interest rate for 20 years, total interest payable will be Rs.32,90,130 while EMI Rs.24,126. A hike of 0.5% will compel borrowers to pay an EMI of Rs.24,959. 

This rise in expenditure can be managed in certain ways. 

Ways to deal with the hike in housing loan interest hike

A potential borrower or existing home loan borrower can check these ways to receive a comfortable interest rate.

• Go for a higher down payment

A home loan applicant can opt for a higher down payment to reduce home loan EMI burden. This process reduces liability from a lender’s end and encourages levying a lower interest rate. Moreover, down payment will reduce the outstanding balance, which automatically makes the financial situation viable.

• Opt for a short repayment tenure

Choosing a shorter home loan tenure during application helps to bring down the EMI and housing loan rates. For instance, a Rs.25 lakh loan with a tenure of 10 years brought down to 7 years will simultaneously reduce the interest payable amount. However, keep in mind that doing so would also increase your EMIs. 

• Choose part prepayment

A borrower can use their extra savings to make part-prepayments for the existing home loan. This would help in reducing the loan obligation and simultaneously lowering the EMI. 

Also, if an applicants' income increases, one can use the funds to increase the EMIs, resulting in faster repayment, thereby lowering the interest payable.

• Transfer home loan balance

Refinancing is an excellent option to reduce one’s burden of monthly repayment. A borrower can opt to transfer the home loan balance to a better lending institution. However, one must consider one must opt for this facility when the tenure is longer like 10-13 years or else the transferring charges may become expensive than the savings made by refinancing.

Taking one or more of these steps should help borrowers reduce additional strain from interest rate hikes.

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Important Things to Remember While Transferring your Home Loan

Besides lower interest rates, home loan transfer also accompanies a range of benefits like better service, pre-approved offers and many more. 

However, to leverage the optimum advantage, individuals have to consider a few things. Here are some of them. 

1. Time of refinancing

It plays a crucial loan in determining the profitability of this facility. Generally, in the initial stages of repayment, individuals mostly service their interest liabilities. Thus, it is often wiser to opt for this facility during the first half of repayment term. 

Financial experts also suggest avoiding this option after 3 years of repayment.  

2. Negotiate Interest rates

Before switching a lender, existing borrowers should negotiate with their lenders for better home loan interest rates. Lenders often offer revised rates to those with an impressive repayment history. 

Thereby, individuals can save on several charges that are applicable while availing this facility. 

3. Additional charges

Typically, a home loan refinancing comes with several charges that borrowers are entitled to pay. For instance, borrowers need to pay processing fees, foreclosure fees, inspection fees, administration fees and others. 

Thus, before approaching a new lender, borrowers have to weigh if the charges are worth the transfer. For more clarity, they can also use a home loan balance transfer calculator to estimate the cost of this facility. 

4. Repo-rate linked loans

RLLR or Repo-rate Linked Lending Rate is determined by RBI. If the repo rate decreases, the interest rates also decrease and vice-versa. Since interest rates are subject to the market scenario, individuals may have to pay a higher interest rate than before in the event of rate hikes. 

On the other hand, borrowers get immediate relief when RBI cuts repo rate, resulting in reduced EMI outgo. 

5. Credit report 

The eligibility for this facility also relies on the credit history of the borrower. Lenders generally offer loan transfer facilities only to those who have an excellent repayment history and a credit score of 750 and above. 

Hence, keeping these facts in mind, individuals can make most of this home loan transfer facility and lower their home loan EMI burden. 

Read Also: Increase You Home Loan Eligibility: 5 Points to consider

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Know How to Deal with Hiked Home Loan Rates With Calm

 Home loan interest rate is determined based on the current market scenario. For instance, RBI controls the repo rate that further influences this rate. On top of that, lenders add their spread, and finally, a rate is proposed to borrowers. 

Thus, individuals who want to get rid of fluctuating home loan interest rates can adopt the following measures. 

• Part-payment 

Individuals can make full use of the surplus cash if they have to pay off a considerable portion of the loan. It will allow individuals to save substantially in interest payment and shorten the tenure. Selected financial institutions also facilitate part-payment with minimal charges. 

In this respect, they can use an annual bonus, interest income from fixed deposits, maturity and the likes. 

• Increase EMIs

Generally, lenders tend to increase the loan tenure if interest rate hikes. Even if it temporarily lowers EMI outgo, the cost of borrowing rises exponentially. Thus, it will be wiser for borrowers to opt for a high EMI and reduce the tenure. 

However, set home loan EMI amount as per repayment capacity, which will ensure smooth loan repayment. 

• Pre-payment

Paying off debts quickly allows borrowers to carry on other financial liabilities with ease. Thus, they can pre-pay EMIs to reduce the principal outstanding, in turn, lowering EMI and interest outgo. 

• Home loan balance transfer 

Another effective way to tackle hiked home loan rates is by choosing loan balance transfer. Existing borrowers can transfer their outstanding loan balance to a new lender, which offers better services and lower interest rates. To maximise the benefits, borrowers should opt for this option in the initial phase of repayment when the interest rate generally remains on a higher side. 

However, this transfer also accompanies several charges that borrowers have to pay both to new and existing lenders. Thus, before selecting, assess the need for the transfer and cost of it. 

These are some of the possible ways to manage hiked home loan interest rate with efficiency. 

Read Also: What factors Affect Your Home Loan Interest Rate

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These Factors are Going to Affect Your Home Loan Interest Rates

 Housing loan interest plays a crucial role in determining the cost of borrowing. Thus, it is imperative for borrowers to know the factors that may affect the home loan interest rates. 

Following are some of them. 

1. Loan amount 

Generally, lenders charge higher interest on borrowing a significant loan amount. Since the interest rates vary with lenders, borrowers need to compare financial institutions to get the best deal. Moreover, they can also opt for a substantial down payment to reduce their EMI component. 

2. Interest type 

Home loans generally come with three types of interest rates, fixed, floating and mixed. While the first two types are self-explanatory, a mixed option contains a fixed interest rate for a specific period, and the rest of the tenure accompanies floating interest rates. 

Typically, lenders levy higher interest rates on fixed and mixed interest rates. 

3. External benchmark of financial institutions 

From October 1, 2019, RBI mandated the financial institutions to link their floating interest rates with any external benchmark like repo rate, Treasury bill rates, and the like. Thus, the interest rate varies depending on this benchmark.

On top of that, lenders also decide their spread which is added to the interest rates. 

4. LTV ratio 

It refers to the percentage of value of a property that is extended to borrowers. RBI has specified that the LTV will be 90% for a loan amount of up to Rs.30 lakh, 80% for a loan amount of up to Rs.75 lakh and 75% for a loan value above Rs.75 lakh. 

Since the loan amount is determined based on this factor, the interest rate and EMI depend on it.

5. Credit score 

Since credit score shows a borrower's creditworthiness, lenders check for this parameter before sanctioning loans. For instance, individuals with a credit score of 750 and above are considered eligible to service a home loan.  

6. Job profile 

The income or type of employment of borrowers determines the interest rate of a home loan. For instance, lenders generally offer lower interest rates to salaried individuals. 

Thus, individuals can look out for these factors to get the best housing loan interest.

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RERA - the Impact on the Real Estate Sector

In the year 2016, the Indian government came up with the Real Estate (Regulation and Development) Act (RERA). Now, it wouldn’t be wrong to say the introduction of RERA has impacted and brought in some revolutionary changes in the Indian real estate, making it safer and more convenient for home buyers to buy a home in India.

However, before talking about the impact of RERA, let's talk about the major challenges faced by the customers.

1. Delay in giving possession to the buyer by the property dealer.
2. Increasing cases of malpractices such as demanding additional money, reduced carpet area compared to the promised size, changing the society plans without informing etc.
3. Property is sold to buyers based on carpet area and not on the super built-up area.
4. Developers diverting the buyer’s money to start a new project instead of focusing on the promised property.
5. Shortcomings in the project.

Moving on, let’s talk about the impact of RERA or the major changes the introduction of RERA will induce.

1. As per the regulations of RERA, "No developer or builder shall advertise, market, book, sell or offer for sale, or invite persons to purchase any plot, apartment or building, in any real estate project or part of it, in any planning area, without registering Real Estate Project (REP) with RERA.”
2. RERA also makes it mandatory for the builders to disclose the details about the project on the website set up by the authorities. 
3. Also, RERA has issued an ordinance making it mandatory for the real-estate developers to deposit 70% of the amount realized for real estate project from allottees, in a separate account to be maintained in a scheduled bank to cover the cost of construction and land cost. In addition, the money so maintained should be used only for the afore shared reasons.

On a concluding note, the next time you buy a property in India, make sure it is RERA verified.

Bottom line: Even though the market situation is not in favor of the builders and property, you, as a customer, can leverage from this golden opportunity and own a property in Bangalore. Another thing which can make the process of buying a flat in Bangalore is a home loan. There are various financial institutions who offer home loan of up to Rs. 3.5 crores which can be paid back in a tenor of up to 20 years. The home loan interest rates terms and conditions, however, vary from one lender to the other. It is thus ideal to check what each lender has to offer thoroughly before choosing a lender.

Additional Read: The launch of RERA Act and How it Impacted the Real Estate Sector

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