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# Step by Step Guide to Calculate Home Loan EMI online - Grihashakti

Updated: July 04, 2022

Home loans are big-ticket loans, which require a long-term financial commitment from the borrower. Hence, the borrower must plan their EMI payments effectively. A lower EMI amount with a longer tenure can result in higher interest costs and a higher EMI amount with a shorter tenure can impact your finances.

If you are confused about how to calculate home loan EMI, below is the step by step guide to calculating home loan EMI online.

## How to Calculate EMI for Housing Loan

There are two ways to calculate home loan EMI. Either you can do the calculations manually, or by using the online home loan EMI calculator.

Since the chances of error in manual calculation is high and accuracy is low, we will focus on the home loan EMI calculator.

## How is Home Loan EMI Calculated?

The Indian real estate market is a booming sector and according to the IBEF report, it is expected to reach \$1 trillion in market size by 2030, up from \$200 billion in 2021.

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

P= Principal Loan Amount
R= Rate of Interest
N= Loan tenure in months or number of EMIs

The above three factors are responsible for the calculation of your home loan EMI amount.

For instance, if the ROI is 7.25%, and you are availing of a loan of Rs 25 lakh for 15 years or 180 months tenor, the home loan EMI will be:

EMI= [25,00,000 * 0.0725* (1+ 0.0725)^180] / [(1+0.0725)^180-1]= Rs 22,822

And, for 18 years tenor, the EMI payable is Rs 20,754.

As it is evident, it takes a lot of effort and calculations to arrive at the EMI amount, when done manually.

## Steps to Use a Home Loan EMI Calculator

An online home loan EMI calculator consists of three blank fields, which you need to fill, they are:

• Principal loan amount
• Rate of Interest
• Loan tenure

Once you fill the blank field and click on calculate, the calculator will show the home loan EMI amount accurately.

The home loan EMI calculator is a general self-help planning tool, which is very easy to use and gives the results instantly.

On the calculator, you can use different loan tenures to check the EMI amount for different tenures and make an informed decision. Additionally, you can use the home loan eligibility calculator to know your home loan eligibility and the maximum amount you may be able to  borrow as a home loan.

## Benefits of Using Home Loan EMI Calculator

Compared to the manual calculation for calculating home loan EMIs, a home loan EMI calculator offers many benefits. It includes:

Fast, Accurate, Simple, and Convenient: The chances of error in the calculator of home loan EMI is zero and provides instant and accurate results every time. Furthermore, the EMI calculator is free and very simple to use.

Helpful in comparing home loan offers: The calculator helps to compare different loan offers that will help you to narrow down the offers and choose the loan that best fits your requirement.

Beneficial in loan management: Partial prepayments are common in home loan repayments. Grihashakti’s prepayment calculator will help to check the total benefits and interest costs saved due to prepayment. Through smart use of our home loan EMI calculator, one can keep the impact of interest costs on home loans to the lowest. The approximate loan schedule can be viewed through the EMI calculator, enabling better financial planning and thus reducing the chances of missing EMI payments.

Helps to pick the right loan amount: Not just calculating the right home loan EMI, but also it helps you to calculate the home loan amount that you can afford to borrow and repay.

Tax Planning: With the home loan EMI calculator, you can easily plan your taxes to take maximum advantage of the income tax deductions. It accurately shows the break up between interest costs paid and principal repaid during the loan tenure.

No personal details required: To use the home loan EMI calculator, you don’t have to reveal your identity or any other details which makes it completely unsafe for you. It’s completely free and you don’t need any sign-up or registration.

### Bottom Line

The home loan EMI calculator is a very powerful tool that helps you to crunch the numbers accurately and lets you make an informed decision. Whether it is a fixed interest rate or floating, a home loan EMI calculator can be used in every scenario.

*Terms and Conditions apply. Loans are disbursed at the discretion of Fullerton Grihashakti.