How to Make Best Use of HDFC Home Loan EMI Calculator?

Availing a home loan is the best way to accomplish your dream of owning a house. With too many banks and financial institutions providing home loan options, it is also easy to get one. There are online tools like HDFC home loan EMI calculator, which helps in understanding the liability that one will get into for a particular amount and tenure of this loan. These calculators not only help in understanding how to calculate home loan EMI, but if utilised properly, they can, in fact, prove to be a very good resource. Here’s a detailed guide on how one can make the best use of it.

Getting a home loan is not very difficult if you have a good credit score and also your DTI (Debt-to-Income) ratio is less than 36%. But, however easy and convenient it is, once you avail the loan, you need to pay the EMIs for the entire tenure that you have opted for unless you decide to preclose it at some point in time. These EMIs will be taken from your monthly income. As home loans are generally for a longer duration of time, you have to make provision for that entire duration.

Before getting into this long time commitment, it is always recommended to make use of the free online tool, HDFC home loan EMI calculator to know the amount of liability that you are getting yourself into. It is important because you will be required to shell out the specified amount each and every month for the next few years.

How Is HDFC Home Loan EMI Calculator Useful?

The HDFC bank home loan calculator has the potential to help you in multiple ways if explored properly. Here are some of the ways in which you can utilize it.

Helps in Checking for the Eligibility Amount: You might be thinking of buying a big house but might not be eligible for the higher loan amount required for it. Instead of going to the bank with high hopes and then feeling embarrassed, it’s better to check your loan eligibility online. The housing loan eligibility is basically dependent on the income, age and the other financial obligations of an individual. Input details, including gross salary, the tenure of loan you want, prevailing interest rate and the amount of any other EMI you are already paying. Once you key in these details, you will immediately get the amount that you are eligible for. This helps in figuring out the houses that you can opt for buying.

Helps in Arriving at an EMI Amount One Is Comfortable Paying: You might be eligible for a higher amount, but the amount of EMI for that might be too high for your comfort level. Try keying in different amounts of Principal and tenure in home loan EMI calculator to arrive at the EMI amount that you feel most comfortable committing to every single month for the next few years.

Helps in Taking Informed Decision: Unless you have numbers in front of you, any deal is not in black and white. It might seem promising, but after looking at the actual figures, it might not be that lucrative. The HDFC home loan EMI calculator also gives the breakup of Principal and the interest part. So, you can see how much a property will actually cost once you are through with your loan payment. Based on that, you can take an informed decision.

Helps in Taking the Prepayment Decision: If at any point during the loan tenure, you get access to some extra amount of money, these calculators help in making the prepayment decision. Though the EMI amount remains fixed for the entire tenure of the loan, the interest and capital component keep changing in each EMI. In the initial years, the contribution is more towards the payment of interest and the situation reverses once you reach almost half your tenure period. Use the EMI calculator to see if you are still paying a considerable amount of interest on your EMI. If yes, prepaying a loan makes sense. However, if your EMI has more of principal repayment, then it’s better to invest this surplus cash in some other instrument that earns you a better return. For example, say your rate of interest on a home loan is around 7.5% and the equity market is doing good, then instead of repaying your home loan, you can invest your surplus cash in some good mutual funds. These will easily get you a return of 12-15% if it remains invested for a longer duration of time.

Makes Life Easy: The manual EMI calculations require the use of a mathematical formula, which is generally a long and tedious process. Also, there are chances of making mistakes when calculating things manually. HDFC home loan EMI calculator is a smart tool, which tells you ta he EMI amount instantly. As you just need to input few variables like loan amount and tenure, you can try different combinations unless you arrive at an EMI amount that looks comfortable to you. The scope of making errors using this tool is also almost negligible.
Conclusion

Additional Read: Dream Home With HDFC Housing Loan Facility

The HDFC home loan EMI calculator is an excellent tool that can be used to find out the amount of EMI one needs to pay if going for a particular amount of home loan. Knowing it beforehand helps in preparing both mentally and financially.

Author Since: Jan 17, 2019

Anoop Bansal, a professional Chartered Accountant based in the National Capital - Delhi. I have worked for the top-notch Indian and International banking firms for the past 10 years. Currently, I work at emi-calculator.loan blog and a financial consultant for different SMEs in India. Follow me on Facebook, Twitter and Linkedin for more information.

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