Your biggest tool in the home loan arsenal is the home loan calculator. You should use the IDFC calculator to proceed with the loan application.
If you are reading this article, chances are that you are looking to buy a house using a home loan.
As a first time buyer, you are probably confused about how the home loan is calculated for monthly EMIs, and how the interest rate affects your loan. Before you get into the nitty-gritties of the home loan numbers, start by using a home loan calculator.
Why use a home loan calculator?
There are two kinds of home loan calculators:
- Home loan eligibility calculators: These help you find out the loan eligibility, i.e. how much loan amount the bank can give you basis your income, age, city of residence, credit score, etc.
- EMI calculators: These calculators help you find the monthly EMI payable basis the principal borrowing, the tenure and the interest charged on the principal.
The home loan eligibility calculator provides the first step in the loan application process. Knowing your eligibility helps you streamline the search for a property that falls within budget. It also helps you reorganise your finances so that you can gather your own reserves to make the down payment, pay stamp duty and registration costs, pre-EMI money, application processing costs, etc.
When starting your house hunt, it is recommended that you use the home loan eligibility calculator available on your bank’s website. The calculators on the IDFC Bank website, and indeed, its home loan offerings, come highly recommended for their ease and simplicity.
The IDFC Bank home loan calculator
You might wrongly estimate the amount of loan you can get from the bank. Start by using the IDFC Bank home loan calculator to find your overall eligibility. The calculator asks for details like your age, income, number of working years left, city of residence and if you have any existing loans. Then it computes these factors to arrive at the loan eligibility amount. You have the freedom to contact the bank directly to discuss these numbers in person.
Next, you can use IDFC Bank’s EMI home loan calculators to find out the probable EMI payment every month. The EMI is not a simple mathematical computation of principal against monthly repayment – it is a function of the interest payable as well, so manual computation might result in wrong figures. It is always better to know the potential EMI payment against the home loan borrowing – if the EMI is 50% or above your monthly income, then it is too high. You must then use the EMI home loan calculator to either reduce the principal borrowing, or increase the tenure so that the EMI is reduced.