Home Loan

RelianceHomeFinance By RelianceHomeFinance, 28th Nov 2016 | Follow this author | RSS Feed | Short URL http://nut.bz/3q97-w19/
Posted in Wikinut>Business>Investment

A home loan makes it easier for an individual to own a comfortable home. It is important to understand the concept of EMI before applying for a home loan. EMI calculator is a useful tool that provides clarity to the borrowers on how the repayment will be done.

Equated Monthly Instalment (EMI) - Its Meaning and Importance in Home Loan

Getting a home loan is one of the most important decisions that a home buyer can make. A home loan makes it easier for people to own a comfortable home. However, to choose the right type of home loan, one needs to have an understanding of the terms related to home loans. One of the most common terms associated with home loan is- EMI.

EMI Meaning

EMI stands for Equated Monthly Instalment. It refers to the fixed amount of money paid to the lender every month. It includes the principal amount and the interest on the principal amount. A borrower needs to pay EMIs until the loan is completely repaid.

Do EMIs Remain Same During Home Loan Tenure?

The amount of EMIs may change during the tenure of home loan due to following reasons-

Floating Interest Rate- In case of floating interest rate, the interest rate varies with market conditions. Thus, the lender can increase or decrease the interest rates depending on the market conditions.

Prepay Loan- The amount of EMIs can go down if the borrower prepays the loan amount. In case of prepayment, the principal amount goes down and the interest is calculated on the new principal.

Progressive EMIs- In case of progressive EMIs, the borrowers are required to pay fixed EMIs initially, and after a few months the amount of EMIs increases. This type of option is suitable for young professionals who are expecting an increase in their salaries in the coming months.

When it comes to taking a home loan, EMIs is one of the most important factors that must be taken into consideration. These days, there is a wide range of tools available that can make the task of calculating EMIs easier. EMI calculator is one such technological tool that can be used to calculate EMIs.

Most lenders provide EMI calculator for home loan on their websites. It’s an easy to use tool that provides accurate results. It provides clarity on how the repayment will be done on month to month basis. With the help of an EMI calculator, the borrowers can easily plan how they will pay the monthly instalments to the lender. This can go a long way when it comes to helping the borrowers choose the right home loan. Most lenders understand the important role played by EMI calculators and make this tool easily available to the borrowers.

Buying a home is dream shared by countless people. A home loan makes it easier for people to realize this dream. It provides the finances required to purchase a new home. As most people can’t pay entire amount of a home upfront, taking a home loan is the most feasible option they have. There are several types of homes loans offered by the lenders and it’s important to choose the right one. With a useful tool like EMI calculator, it becomes easier for the borrowers to select the right home loan and plan their EMIs.

Tags

Finances, Financial, Financial Investment, Home Loan, Installments, Loans

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author avatar RelianceHomeFinance
Reliance Home Finance is a part of leading Finance service provider in private sector i.e Reliance Capital Ltd.

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