A home loan calculator calculates the EMIs that you will pay to the lender until the mortgage is entirely paid off. Your spending plan must be significantly changed after obtaining a home loan in order to cover the EMI. In such instances, a home loan eligibility calculator can estimate an amount that you can secure without creating an unnecessary repayment burden. Find out about more such benefits of home loan calculators in financial planning.
Features of a Home Loan Calculator
The common features of a home loan calculator are as follows:
It gives you a detailed breakdown of charges associated with your loan.
It helps you avoid performing the lengthy calculations manually.
It lets you plan out your finances and EMIs way ahead.
How Can a Loan Calculator Make Financial Planning Simpler
When opting for a home loan, a home loan calculator can help you in several ways. These are as follows:
1. It Helps You in Selecting the Right Lender as well as the Loan Amount
With so many lenders providing low-interest home loans, it might be difficult to find the best one. So, when choosing a loan with the greatest value for your money, you may use the EMI calculator to compare the overall costs of several loans. Once you have calculated the EMIs, you can choose the one you are comfortable paying.
2. It Makes Loan Prepayment Planning Easier
Planning for the repayment of a home loan is easier when you have an estimate of the anticipated EMI. For instance, if you are aware of your EMI, you can manage your finances.
3. It Helps in Picking the Right Tenure
The loan tenure is important in figuring out how much you will be paying as monthly instalments. If you have a longer tenure, your home loan EMI will be lower. However, a shorter period would result in a higher EMI. Therefore, you should choose a term depending on your expenses and income so that your EMIs are affordable. Using the EMI calculator, you may determine an appropriate tenure.
4. It Shows Results Within Seconds
The process of manually estimating EMIs is time-consuming and prone to inaccuracy. With an EMI calculator, you can get error-free calculations quickly. Moreover, you may test as many combinations and permutations as you like to discover an EMI that truly works for you with the help of its instant results.
5. It is Simple to Use
Using a house loan calculator doesn't need any complex calculations. Your EMI will be accurately calculated and shown on your computer screen in a matter of seconds after you enter the principal amount, interest rate, and loan tenure.
Factors Affecting Your Home Loan Eligibility
Home loans are large-figure credits and a long-term financial commitment. Therefore, you must know the factors that affect your loan eligibility. They are as follows:
Age: The lender uses your age to estimate the number of years you will have to repay the loan. Therefore, if you are opting for a loan at a younger age, you are likely to get a longer tenure for loan repayment. So if you apply for a house loan during your prime earning years, your loan EMI repayment becomes smoother.
Credit Score: Credit score is a vital feature in determining your eligibility, loan amount, tenure, and more. A credit score of over 750 is considered healthy, and thus improves the chances of your loan application getting approved.
Income: Your monthly earnings effectively inform the lender of your ability to handle your funds for home loan EMIs. Furthermore, you should make sure you have a reliable source of income when applying for a house loan because it will improve your overall eligibility.
Loan Repayment Tenure: Choosing a longer payback period for your mortgage will improve your eligibility. This is because your EMI obligations are reduced and become more affordable with a longer term.
Debt-to-Income Ratio: Lenders favour their borrowers with debt-to-income ratios of 40:60 or below. Consequently, your chances of being approved for a home loan are greater if you meet this criterion. In addition, too many open credit accounts don't give a good impression since they suggest bad credit activity.
Simple Ways to Boost Your Eligibility for Home Loan
Before applying for a home loan, it would be wise to check your eligibility. You can do that using the eligibility calculator from most lenders online such as LIC HFL home loan , and improve your eligibility using the following ways:
Apply for a joint loan with a family member as your co-applicant.
Ensure that your finances and income are stable.
Go for a structured repayment plan.
Include the details of any additional income sources if you have any.
In case your CIBIL score contains inaccuracies, you must register a dispute right away. Usually, a credit agency needs between 30 and 45 days to address errors.
Keep track of the different parts of your income, including bonuses, incentives, or any special cash payments.
A strong credit history is essential in getting approved for a high credit amount. Therefore, your electricity bills, credit card bills and other debt payments must always be paid in full and on time and you must not have any previous liabilities.
A loan calculator such as the home loan eligibility calculator is a helpful financial tool that can make your home loan repayment process easy. It offers you an insight for the repayment early on so that you can choose the plan suitable for you. Moreover, using this calculator is quick, easy and more accurate, which gives you enough time to compare lenders and select the best one.
