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## Home Loan EMI Calculator

Financial planning is absolutely critical If you want your financial position to be secure and stable. However, before planning your finances, you must know how much you need to pay for each of these commitments. The home loan EMI calculator helps you to make an informed decision about creating a provision for each commitment beforehand.

## How to use the Home Loan EMI calculator

It's very easy to use the home loan EMI calculator. All you need to do is key-in certain inputs. These include:

• ### Loan amount

It is the amount that you want to avail.

• ### Rate of interest

This is the cost of your home loan that needs to be paid as a part of your EMIs. .

• ### Loan tenure

This is the repayment tenure over which you will pay your EMIs.

After you enter the inputs, you will instantly get the EMI amount that needs to be paid.

## How is Home Loan EMI calculated?

Let us say that you have borrowed INR 20 lakh from a bank at the rate of 10.25% for a period of ten years or 120 months.

Then your EMI as per the formula would be: INR 20 lakh*0.008542*(1+0.008542) ^120/((1+0.008542)^120-1))= INR 26,708 per month.
In a span of 120 months, you will end up paying INR 32,04,919. Out of this, INR 12, 04,919 will be paid towards the interest.

## How to Calculate Home Loan EMI Using Formula

### EMI Calculation Formula

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

EMI Equated Monthly Instalment

P - Principal amount (amount borrowed as loan)

R - monthly rate of interest

N - Loan repayment tenure (in months)

The above formula is used to calculate home loan EMIs either manually or through MS Excel. Calculating EMIs manually can take a lot of time. Hence, it is best to use a home loan calculator to calculate your EMIs.

## What are the benefits of a home loan EMI calculator?

A home loan is a long-term commitment. Hence, you need to know the exact monthly amount that you would require to keep aside. Home loan calculator is beneficial for calculating a manageable EMI for you. Once you are sure you can meet the EMI payments regularly, you will be able to enter into an agreement with the bank. You can also negotiate the rate of interest or the tenure of the loan if you want an EMI that is manageable for you.

## Are you eligible for a home loan?

The eligibility of home loan takes into consideration your citizenship, your work experience and your age. You can apply for a home loan of up to INR 5 Crores. Check out the complete home loan eligibility criteria for further details.

## Why choose Home Loans on Finserv MARKETS?

Avail flexible repayment, balance transfer and top-up options, Pradhan Mantri Awas Yojana, with complimentary value added services when you avail a home loan. Get a complete understanding of the features and benefits of home loan and get your dream home now.

• The total amount that you can borrow on your home loan.
• Whether you must opt for a short-term or long-term home loan.
• The optimal amount that you must direct towards your home loan down payment.

## How Can You Reduce Your Home Loan EMI?

Reducing your home loan EMI is a good way to bring down costs and manage your finances. Here are some ways through which you can reduce the EMI:

• Choose a lower loan amount.
• Pick a longer repayment tenure.
• Try to get the lowest rate of interest on your loan.
• Opt for a home loan balance transfer if you get a better deal on the interest rate.

## Factors that Affect your Home Loan EMI

Here is a list of factors that affect Home Loan EMI:

• ### Change in the interest rate

Any kind of change in your home loan interest rate during the tenure can have a positive or negative impact on your EMI. If you have already taken a home loan with floating interest rates then there will be changes in your EMI depending on the prevalent lending rates in the market. This means, every time there’s changes in bank rates, your EMI will be affected.

• ### Change in Tenure of the loan

Even the slightest change in the tenure of the loan can impact your monthly equated installment. The basic principle says that, the longer the tenure, the lower will be your loan EMI and vice versa.

• ### Pre-payment of Home Loan Principal amount

Prepaying your home loan brings down the principal amount and lowers the interest burden on you. However, you may be charged with a pre-payment penalty. You can try and negotiate with your lender to bring down the pre-payment penalty charges to as little as possible.

• ### Step-Up or Step-Down Repayment

A step-up home loan repayment option is considered for those who have just got started with their career. Your EMI will increase with time. On the other hand, Step-down payment is convenient for those who are close to their retirement. Here, you start with EMIs of high amounts and gradually pay lesser with time.

## What is Home Loan Prepayment and How Does it Help?

Home Loan Prepayment is a facility that helps you repay your home loans if you have surplus funds before the completion of your home loan tenure. This ultimately reduces the outstanding principal amount owed, and in turn, reduces your EMIs or the remaining loan tenure.

## What is a Home Loan Pre-EMI?

Pre-EMI is the applicable interest payment to the amount that is disbursed over the entire tenure of a home loan. It begins when the house is under construction. Once the home structure is done, your loan pre-payments will stop. Post this, the regular EMI payments begin.

## Tax Benefits of Paying Home Loan EMIs

• Deduction for Interest Paid on Home Loan

• Tax deduction for interest paid on a home loan during the pre-construction period

• Deduction on Principal amount repayment

• Deduction for Stamp Duty and Registration Charges

• Co-owners of the property can claim deduction for Joint Home Loan

## Frequently Asked Questions on Home Loans

• ### ✔️Is it mandatory to have a co-applicant when applying for a Home Loan? If yes, who can be a co-applicant for my Home Loan?

It is not mandatory to have a co-applicant. If someone is the co-owner of the property in question, it is necessary that he/she also be the co-applicant for the Home Loan. If you are the sole owner of the property, any member of your immediate family can be your co-applicant.
• ### ✔️How do I update my new postal mailing address?

If your new mailing address is the same for which the Home Loan has been taken, you may change the address by logging in to our Customer Portal. If your new mailing address is not the one for which the loan has been taken, you will need to visit us in person at your nearest branch along with an original and self-attested copy of your new address proof and photo identity. For the list of documents, we can accept for verification Proof of new residence to be provided.
• ### ✔️How do I update my mobile number and the email address registered under my Home Loan account?

You may update your mobile number and email address by logging in to our Customer Portal.
• ### ✔️Is Provisional Interest Certificate provided to the customer?

Provisional Interest Certificate gives the Principal and Interest breakup for the scheduled EMI for a complete Financial Year i.e. from April to March. This calculation can be used for claiming the Income Tax rebates in appropriate cases under Section 80C as well as Section 24 of the Income Tax Act. The calculations are based upon Current Principal Balances, Current ROI and Current EMI along with any changes recorded in the Current Financial Year. Any change that may happen before the end of the Financial Year will alter the calculation and the figures. You can get this by logging in to our Customer Portal.
• ### ✔️Does the Income Tax certificate change when rates change?

The Provisional Income Tax Certificate can change under certain circumstances like change in Interest Rate. The projection is calculated on “as is” basis and does not consider any future change that may happen either on the Interest, EMI or the Principal.
• ### ✔️How will my Equated Monthly Installment (EMI) be calculated on my loan?

Your EMI consists of two parts—paying back the principal amount you borrowed, plus the interest rates charged ‘on’ it. Three factors come into the equation—how much you borrowed, the rate of interest, and the loan tenure. There are ways to bring your EMI down: for one, it drops automatically if there is a drop in the interest rates, or if you pay back more than you need to (called a ‘partial prepayment’).
• ### ✔️What are my different options for making my EMI payments on my home loan?

There are two ways of going about this: 1. An Electronic Clearing Service (ECS) is an easy and convenient option, available exclusively to those that have a bank account. Your EMIs get paid out automatically from your account every month, at a specified date. 2. With us, you may also choose to hand in a fresh set of Post-Dated Cheques (PDCs) ahead of time, from any bank account. Note that this is only for those customers in non-ECS locations. ECS is the preferred mode, as it’s faster and there are no chances of errors. Plus, there’s no hassle of replacing PDCs when the EMI changes, or when they run out.
• ### ✔️I have availed of a Home Loan from you on a floating rate of interest. How will an increase in this rate of interest impact me?

When there’s an unexpected increase in interest rates, we first attempt to make things easier on you by increasing the loan tenure—within permissible limits. If this doesn’t resolve the issue—covering interests under current EMI—we’ll need to increase the EMI. Another solution—you can choose to part-prepay online via the Customer portal. Alternatively, you can make a partial prepayment at our nearest branch to reduce the interest amount.
• ### ✔️How can I change the EMI payment amount during the life of a loan?

You can choose to pay your EMIs by electronic methods (ECS), by handing in post-dated cheques, or through direct payments. Going in for the ECS option, you’ll need to pay the revised amount from the subsequent month; you’ll be paying the differential amount separately, during the current month. If you’re going with the PDCs, you’ll need to completely replace your old cheques. You can also choose to increase the EMI amount whenever you choose to during the loan tenure, which will result in reducing the loan tenure. To avail this option just logon to our Customer Portal.
• ### ✔️What is negative amortization?

When interest rates go up, the interest component of an EMI also goes up. The EMI is kept constant as explained in the previous section, which results in a lower principal component. If the rates move up continuously, then there might be a situation where the interest Component becomes more than the EMI. In such a situation, principal component (EMI minus interest component) gives a negative figure. Consequently, the outstanding balance, instead of being reduced from the opening principal with the principal component, gets increased with the negative principal component. This is commonly referred to as negative amortization. A loan where the amortization is negative does not get repaid, ever since the regular payments are insufficient to cover the interest component. The unpaid interest gets added to the principal and makes it grow. The situation gets reversed only when interest rates start falling. The customer does part-prepayment or increases the EMI.
• ### ✔️How does any rate change impact the home loan amortization schedule?

In case of a home loan with variable rate, the interest rate used to calculate the interest component is subject to variation. When rates change, one of the following changes can be done to a loan: 1. The term of the Loan is extended (when rates go up) or contracted (when rates go down). 2. The Instalment (EMI) amount is reset (increased in case rates go up & reduced in case rates come down). 3.As a practice, the term of the home loan is extended since the self-employed customer, might have given PDC’s and it would be difficult to replace them on every rate change. However, in case of under construction properties, the Pre-EMI amount is increased by default.
• ### ✔️Is there any early warning mechanism before negative amortization?

In case the interest component exceeds 85% of the EMI amount at any time, it should be a warning to the customer. This will ensure that variation in interest rates does not cause any inconvenience.
• ### ✔️On what basis does the internal FRR change?

Internal FRR is the benchmark reference rate. This is determined on the basis of market conditions and the cost of funds for the company. These changes depend on various external factors and economic conditions.
• ### ✔️How often do Interest rates change?

As per our re-pricing policy, home loan interest rates are reviewed every 2 months and a decision is taken whether to change the interest rates or keep that unchanged.
• ### ✔️Do you pro-actively do downward Re-pricing?

This is a bi-annual exercise that is yet another an industry first for any NBFC in the country. As a goodwill gesture and to maintain transparency with our valued, existing self-employed customers, we ensure through our pro-active downward re-pricing strategy, that none of our existing customers are more than 100 basic points over and above the last 3 months average sourcing rate. If customers are higher than 100 bps from our last 3 months average sourcing rate, we carry out downward re-pricing of the rate of interest for them. This brings them to maximum 100 bps above the last 3 months average sourcing rate.
• ### ✔️What is part disbursement of home loan?

Home Loan sanctioned for under construction property is disbursed in installments by us. These disbursements in installments are called part / subsequent disbursement.

• ### ✔️How do I take my next part disbursement?

You will need to submit online request for part disbursement, along with the following documents. 1. Scanned copy of demand letter from the builder. 2. Receipt of last payment made to the developer.

• ### ✔️Is there any CIBIL impact if I foreclose my Loan?

No, foreclosure of your loan will have no impact on your CIBIL score. Once the loan is foreclosed the same would be reported to CIBIL as ‘Closed’ and it would have no impact on your CIBIL Score.
• ### ✔️What is Pre-EMI interest?

Pre-EMI interest is the interest that you need to pay on the amount you borrow. Commencing from the date of each disbursement, you can pay each month, until EMI payments start.
• ### ✔️What should be my salary based on the city of my residence?

Based on your city of residence, to get a home loan, your salary should be the following - (1). Minimum Salary; Rs. 30,000 - For Delhi, Gurugram, Faridabad, Greater Noida, Noida, Ghaziabad, Mumbai, Thane, and Navi Mumbai. (2). Minimum Salary; Rs. 25,000 - For Bangalore, Pune, Hyderabad, Chennai, Ahmedabad, Kolkata, Jaipur, Chandigarh, Coimbatore, Nagpur, Surat, Cochin, Baroda, Indore, Vizag, Nasik, Aurangabad and Lucknow.
• ### ✔️What should be my minimum property value based on the city of my residence?

The minimum value of your property should be as follows: (1). 40 Lakhs - For Mumbai, Delhi (excluding NCR). (2). 30 Lakhs - For Bangalore, Pune, Hyderabad, Chennai, Thane, Navi Mumbai, NCR (Faridabad, Gurgaon, Ghaziabad, Noida and Greater Noida.) (3). 20 Lakhs - For Kolkata, Ahmedabad, Chandigarh, Cochin, Coimbatore, Indore, Jaipur, Nagpur, Surat, Baroda, Nashik and Vijayawada. (4). 15 Lakhs - For Aurangabad, Vizag and Lucknow.
• ### ✔️What is the TAT(Turn Around Time) for Foreclosure Statement?

The TAT for issuance foreclosure statement is typically 7 working days.
• ### ✔️Who can avail Pradhan Mantri Awas Yojana Credit Linked Subsidy Scheme?

A beneficiary family: 1. Provided that he/she does not own a pucca house (an all-weather dwelling unit) in his / her name in any part of India. 2. Provided also that in the case of a married couple, either of the spouses or both together in joint ownership will be eligible for a single house, subject to income eligibility of the household under the Scheme
• ### ✔️What constitutes Household/Beneficiary family?

A beneficiary family will comprise husband, wife, unmarried sons and/or unmarried daughters. An adult earning member (irrespective of marital status) can be treated as a separate household.
• ### ✔️What are the income norms for various categories?

The income norms for various Household categories are defined as under: 1. EWS households/individuals with an annual income up to Rs. 3.00 lakh. 2. LIG households/individuals with an annual income more than Rs. 3.00 lakh and up to Rs. 6.00 lakh. 3. MIG I households/individuals with an annual income more than Rs.6.00 lakh and up to Rs.12.00 lakh 4. MIG II households/individuals with an annual income more than Rs12.00 lakh to INR 18.00 lakh.
• ### ✔️What are the documents required to apply for the PMAY subsidy scheme?

Following documents needs to be submitted to avail PMAY subsidy scheme: 1. Declaration Form (Stamp duty to be the same as Affidavit, as per State Laws). 2. Permanent Account Number (PAN). If PAN is not assigned, Form 60 is required. 3. Aadhaar Number all the applicants in the Beneficiary family (For MIG I & MIG II category). 4. Income proof of the applicant [Applicable Income Proof documents - ITR or Form 16 (1 year)/ Salary Slip (Gross Monthly Salary*12)]. 5. PMAY Addendum (Stamp duty to be the same as Top-up addendum, as per State Laws). 6. End-Use Undertaking Certificate
• ### ✔️How will I receive the interest subsidy benefit under Pradhan Mantri Awas Yojana?

Once the loan amount is disbursed subject to eligibility, BHFL will claim the subsidy benefit the subsidy for eligible borrowers from NHB (National Housing Bank). For all eligible borrowers, the subsidy amount would be paid to BHFL. Once BHFL receives the interest subsidy, it will be credited upfront to the loan account and EMI will be readjusted.
• ### ✔️Is there any limit to the loan amount or the property value?

There is no limit to the loan amount, however interest subsidy will be calculated on a maximum of Rs. 6 lacs for EWS/LIG, Rs. 9 lacs for MIG I and Rs. 12 lacs for MIG II. Also, there is no limit to the property value but there is a limit to the carpet area for each of the category. The carpet area of houses being constructed or enhanced under this component of the mission should be up to 30 square metres and 60 square metres for EWS and LIG, respectively in order to avail of this credit linked subsidy. The beneficiary, at his/her discretion, can build a house of larger area but interest subvention would be limited to first Rs. 6 lakh only. The maximum carpet area of the dwelling unit is 120 sq.m./1291.67 sq. feet for MIG I category and 150 sq.m./1614.59 sq. feet for MIG II category.
• ### ✔️What is the interest subsidy applicable for each of the category?

The applicable interest subsidy on the eligible loan amount for each of the category is given below: 1. EWS/LIG: 6.5%. 2. MIG I: 4%. 3.MIG II: 3%
• ### ✔️My spouse already owns a Pucca House and now I want to buy one new property on my wife’s name. Can I qualify for the CLSS scheme under PMAY?

No, household cannot take the benefit under CLSS as spouse in beneficiary family/household already owns one property.
• ### ✔️What is the maximum tenure on which the PMAY subsidy is applicable?

The PMAY subsidy is applicable for a maximum considered tenure of 20 years. BHFL can offer tenure as per existing policy however, subsidy will be calculated, lower of: 1. 20 years 2. Offered tenure by BHFL
• ### ✔️Are there any additional eligibility norms apart from income, first pucca house and carpet area norms?

The property should have basic civic infrastructure like water, toilet, sanitation, sewerage, road, electricity etc.
• ### ✔️Is it required to provide the Aadhaar card details for all the members of the beneficiary family?

Yes. To process the case under PMAY scheme for MIG I & MIG II categories, it is a mandatory requirement to provide the Aadhaar card details of all the applicants in the beneficiary family.
• ### ✔️What is the processing fee to avail the scheme?

BHFL will not take any processing charge from the beneficiary for eligible housing loan amount as per income criteria under the Scheme. For additional loan amounts beyond the eligible loan amounts for interest subsidy, processing fees will be charged by BHFL.
• ### ✔️What is the TAT (Turn Around Time) for Foreclosure Statement?

The TAT for issuance foreclosure statement is typically 12 working days.
• ### ✔️Whether repairing work to the existing house is covered for benefit under the Scheme?

Repairing work to the existing house can be undertaken in houses which are kutcha, semi pucca and require extensive renovation to make it into a pucca house. However, this is applicable only for applicants in the EWS and LIG categories.
• ### ✔️Glossary of terms.

1) Floating Reference Rate – It is a benchmark rate used by Financial Institutions to determine effective interest rates on loans. 2) Outstanding Principal – Principal amount which reduces every month in line with amortization/repayment schedule. It is called as Principal Outstanding (POS). 3) Sanctioned Limit – Sanctioned loan amount is referred as Sanctioned Limit for flexi facilities wherein customer can prepay or withdraw anytime to the extent of available limit. 4) Dropline Limit – Dropline limit is the maximum amount which can be withdrawn by the customer in case of Flexi Facility . It reduces every month in line with the principal portion repaid through equated monthly installments. 5) Floating Rate – A floating interest rate is an interest rate that moves up and down according to the rise or fall in the market interest rates. 6) Fixed Rate - A fixed rate is an interest rate that is set to remain the same for the term of a loan.
• ### ✔️Are there any tips on how I can reduce my EMI burden?

To effectively manage your home loan EMI, a borrower should keep it less than 50% of their monthly income. This way customer can increase their EMIs when required with ease. Stepping up EMI helps to reduce loan tenure since higher EMI results in faster repayment of the loan.
• ### ✔️What is Home Loan EMI?

Home Loan EMI (Equated Monthly Installment) is the monthly repayment that a borrower should make to repay the home loan amount as per the amortization schedule.
• ### ✔️What is a Home Loan Amortization Schedule?

Loan amortization is the process of reducing the debt with regular payments over the loan period. A home loan amortization schedule is a table that provides details of the repayment amount, principal and interest component.
• ### ✔️Who can apply for a home loan?

A home loan applicant should be above 21 years of age at the time of loan commencement and up to the age of 60 or superannuation, whichever is earlier at the time of maturity of the loan. You can check the loan amount you need to pay as EMI with the help of a Home Loan EMI Calculator.
• ### ✔️Can the Home Loan EMI Change or is it Fixed?

Yes, you can voluntarily increase or decrease your EMI at the time of prepayment provided home loan tenure is not breached. Also under the floating interest rates, you can prepay the loan at any time without charging any penalty.

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