What is a Home Loan Repayment Calculator?
Home loans are long-term loans. The tenor for these loans ranges from 15 to 20 years. The chances of life taking unexpected turns are high when the loan tenor is so long. Thus, in the case of home loans, an individual must decide the loan amount carefully. They must also prepare a repayment strategy beforehand. A home loan repayment calculator is the tool that proves most helpful in this quest.
The home loan repayment calculator is an online tool that lets borrowers calculate their loan EMIs in advance. A loan repayment calculator is also known as a home loan EMI calculator or simply a home loan calculator. These calculators require users to enter only three details: loan value, loan tenor and the rate of interest they are being offered. Once a user enters these three values, the home loan EMI calculator gives them their loan EMIs alongside giving them their total interest payout and the cost of borrowing the loan.
Home loan prepayment calculators are a highly beneficial tool. However, there are a few essentials one must keep in mind when using this tool.
Home Loan Prepayment Calculators: Here’s What You Must Keep in Mind When Using this Tool
1. Home loan applicants must use the home loan EMI calculator to compare different offers from different lenders. This will help them choose the right loan offer for them. Since the home loan repayment calculator is quick and accurate, it will give you your EMIs in correspondence to different loan offers within seconds. Comparing different offers will help you choose the most beneficial one for you.
2. Home loan applicants must use the repayment calculator for repayment planning. Once a loan borrower knows their EMI in advance, they can plan their monthly budget and cut down on unnecessary expenses so that they can easily accommodate their home loan EMIs. This will save them from making any mistakes regarding their affordability and repayment capacity and save them from having to pay late fees and other penalties, which in turn, increase the cost of borrowing the loan.
3. Borrowers and those who have availed of a home loan must also use the home loan repayment calculator to figure out the ideal time for home loan balance transfers. Most loan borrowers use the home loan balance transfer facility to benefit from a lower interest rate. However, for the home loan balance transfer facility to prove beneficial, borrowers must choose the ideal time to opt for this facility. The amortization schedule that the home loan repayment calculators provide can help one decide the ideal time for a home loan balance transfer.
Most home loan borrowers also try and make prepayments whenever possible. They do so to try and become debt-free as quickly as possible. The home loan repayment calculator gives borrowers their amortization schedule and loan borrowers can look at this schedule to figure out the ideal time for making prepayments or opting for foreclosure.
In conclusion, the home loan repayment calculator is a highly beneficial tool that every home loan applicant must use. The best part is these calculators are free to use. One need not pay any fee to use them. Further, since their user interface is quite simple, anyone with a basic understanding of how a laptop or a smartphone works can use these calculators to aid them with repayment planning and other things.
