Home Loan Calculator
Summary
| Monthly EMI | ₹0 |
|---|---|
| Principal Amount | ₹0 |
| Total Interest Amount | ₹0 |
| Total Pay Amount | ₹0 |
| Rate of Interest % (p.a) | 0% |
Chart
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A home loan is a type of loan provided by financial institutions such as banks or housing finance companies to individuals for the purpose of purchasing a residential property. Here’s an overview of home loans:
Purpose:
Home loans are primarily used to finance the purchase of a house or apartment, whether it’s for self-occupation or investment purposes.
Key Features:
Loan Amount: The maximum loan amount sanctioned depends on various factors such as the applicant’s income, creditworthiness, property value, and loan-to-value (LTV) ratio.
Interest Rate: Home loans can have fixed or floating interest rates. Fixed rates remain constant throughout the loan tenure, while floating rates can fluctuate based on market conditions.
Loan Tenure: The repayment period for home loans typically ranges from 5 to 30 years, although some lenders may offer longer or shorter tenures.
Monthly EMI (Equated Monthly Installment): Borrowers repay the loan through monthly installments comprising both principal and interest components.
Security: The property being purchased serves as collateral or security for the loan. In case of default, the lender has the right to foreclose on the property to recover the outstanding amount.
Eligibility Criteria:
Income: Lenders assess the applicant’s income to determine their repayment capacity. Salaried individuals, self-employed professionals, and business owners are eligible to apply for home loans.
Credit Score: A good credit score increases the likelihood of loan approval and may also help secure lower interest rates.
Age: Applicants must meet the minimum age requirement specified by the lender, usually between 21 and 65 years.
Documents Required:
Proof of Identity (e.g., Aadhaar card, passport)
Proof of Address (e.g., utility bills, rental agreement)
Income Proof (e.g., salary slips, income tax returns)
Property Documents (e.g., sale deed, NOC from the builder)
Types of Home Loans:
Purchase Loan: For buying a new or resale residential property.
Construction Loan: For constructing a house on a plot of land owned by the borrower.
Plot Loan: For purchasing a residential plot of land to build a house in the future.
Home Improvement Loan: For renovating or repairing an existing home.
Tax Benefits:
Borrowers can avail tax benefits under the Income Tax Act, such as deductions on principal repayment (under Section 80C) and interest payment (under Section 24).
How to use LM Wealth Home Loan calculator?
LM Wealth Home Loan Calculator is a tool used to estimate the monthly EMI (Equated Monthly Installment) and the total interest payable on a home loan based on certain input parameters. The formula used by Home Loan Calculators is the formula for calculating the EMI of a loan, which takes into account the loan amount, the interest rate, and the loan tenure.
Here’s how the formula works:
Monthly EMI = [P × r × (1 + r)^n] / [(1 + r)^n – 1]
Where:
Monthly EMI is the Equated Monthly Installment.
P is the principal loan amount.
r is the monthly interest rate (annual interest rate divided by 12 and expressed as a decimal).
n is the loan tenure in months.
Here’s a step-by-step guide on how to use a Home Loan Calculator:
Input the loan amount (P), which is the total amount borrowed as a home loan.
Input the annual interest rate (r), which is the rate charged by the lender annually. Convert it to a monthly rate by dividing by 12 and then by 100 to get a decimal.
Input the loan tenure (n) in months, which is the duration of the loan in terms of the number of months.
Click on the calculate button or press enter.
The calculator will then compute and display the monthly EMI.
Additionally, some Home Loan Calculators may also display the total interest payable over the loan tenure, the total amount payable (loan amount + total interest), and an amortization schedule showing the breakup of principal and interest components for each EMI.
For example, let’s say you take a home loan of ₹50,00,000 (₹50 lakhs) for a tenure of 20 years (240 months) at an annual interest rate of 8%. Using the formula:
r = (8/12)/100 = 0.006667 (monthly interest rate)
n = 240 (loan tenure in months)
EMI = [₹50,00,000 × 0.006667 × (1 + 0.006667)^240] / [(1 + 0.006667)^240 – 1]
≈ 41,822.05 (rounded off to two decimal places)
So, the estimated monthly EMI for the given home loan would be approximately ₹41,822.05.
It’s important to note that Home Loan Calculators provide estimates based on the input parameters, and actual EMIs may vary due to factors such as processing fees, prepayments, and changes in interest rates.