Do it Yourself Home Loan EMI calculator

Having a roof on the head is a basic need of man. Today everyone wants to own a house of their own without having to think about the trouble to locate a rented house. More often than not the person dreams to have a home which he can decorate in his own way and sleep soundly in it. Most of the people go for home loan to fulfill this dream of there.

But with the recession all around, many homes are going for foreclosure. The reason being non payment of EMI (equated monthly installment) on the mortgaged amount due to shortage of credit and finances. But it should not deter you to go for a home loan. Now there can be two kinds of situations.

• One is where you already have taken a home loan but not able to pay the earlier calculated EMI due to any financial reason.
• The second situation is when you are going for the loan for the first time.

You can calculate your home loan EMI yourself so that you can give proposal to the lender and come out with a solution where you are able to get a home loan at an EMI that will be easy on your pocket. There are few ways by which you can get a better deal:

• Many people will advice you to have a shorter duration of the loan tenure so that your loan is repaid quickly and you need not drag it for long. They argue that if you can re pay the loan quickly then you have to pay less interest. This will mean a higher EMI but a shorter duration. This may be alright for people who can afford the higher EMI without much difficulty but it may not be suitable for some people.
• Then there are others who would like to keep the EMI manageable and thus have a longer tenure. Though the monthly liability is less but if you calculate, you will find that you end up paying a lot higher than what you though due to the high interest.

The solution can be to get the best for both. Pre-payment of loan can be the answer to your question. You take a loan tenure which is comfortable for you and the EMI which is manageable. Once you have some king of excess finance such as year end bonus, you can make a lump- some payment. This lump some payment will substantially reduce your amount due and thus your loan liability will decrease. This will bring down the tenure of loan without creating any dent in your pocket.

The only hitch is the pre-payment fee that is charged by the banks. In some banks, up to two prepayment in a financial year are allowed. Most of the lenders charge anything between 1 to 3 percent of the outstanding amount if the pre-payment is more than that is specified and allowed by the bank.

You can calculate whatever EMI you can afford to give, without much strain on your finances and start the EMI. But it is important to continue on making pre-payment, whenever possible to pay off the loan easily and at the earliest.