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A Guide To The Optimal Use Of The Home Loan Calculator

Congratulations on making the most critical decision of your life – to be a homeowner. However, paying the full amount at one go can be challenging, a reason why home buyers rely on home or housing loans to facilitate a smooth purchase. To make your task convenient, Indian lenders often provide some free tools, such as a home loan calculator. Read on to know how a home loan calculator can help you tweak the loan terms in your favor.

What is a Home Loan Calculator?

A home loan calculator lets you decode home loan interest rates better. While home loan rates give you a general idea about the money you need to pay, a loan calculator gives you an exact estimate of the EMI amount. A home loan calculator needs the following three figures to provide you with the EMI amount:

Principal – Principal refers to the loan amount. The loan amount can be up to 90% of the property you wish to purchase or construct. The loan amount is directly proportional to the EMI. Therefore, if your loan amount is high, the EMI will also be high and vice versa.

Interest – Home loan rates can be fixed or floating. Unlike fixed-rate loans, floating-rate loans depend on the actions of the Reserve Bank of India (RBI). If the RBI increases the lending rate, home loan rates jump. Conversely, home loan rates fall if the RBI decreases the lending rate. Even a 1% change in the lending rate can affect your EMI significantly.

Loan Term – Home loan term usually ranges between five and thirty years. As the principal, the loan term is also directly related to the EMI. Therefore, if you choose an extended loan term, your EMI will be more affordable than a short-term loan.

The Top Benefits of Using a Loan Calculator

Using a loan calculator is beneficial for the following reasons:

1. Interpret Home Loan Rates – A loan calculator gives you more power to understand the home loan rates. You can get the rates from the lender’s website and enter them in the box provided to check the EMI amount.

2. Compare Lenders – Choosing the right lender is crucial to get the maximum benefits from a housing loan. A  loan calculator makes it relatively easy to compare lenders. You may acquire information about the rates offered by different lenders and check the difference in the EMI. Once you find a suitable EMI, you can finalize the lender.

3. Free to Use – Top Indian lenders provide loan calculators for free. You can use it as many times you want and whenever you wish to.

4. Plan Better – A home loan is designed to make house purchases more convenient. But, it can also burden you financially. A loan calculator lets you plan better by giving you an accurate estimate of the EMI. You can have a clear idea of your monthly liability and plan accordingly.


A home loan calculator is one of the most straightforward tools you can use to plan your loan efficiently. The fact that it is available for free also increases its attractiveness. So, what are you waiting for? Open a loan calculator to check the real meaning of home loan rates and make professional decisions.

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