People who own residential or commercial property can pledge it as security and avail of a loan against it. Such loans are known as mortgage loans or property loans or loans against property. Low mortgage loan interest rates, long repayment tenor, substantial loan amount and flexible end-use are some of the key benefits associated with these loans. Since loans against property involve collateral. Consequently, borrowers are advised to use a loan against property EMI calculator.
What is the Loan Against Property EMI Calculator?
The loan against property EMI calculator is an online tool that helps loan borrowers calculate home loan EMIs for a selected combination of the loan value and tenor beforehand. Almost all lenders host these tools on their websites and one can use these calculators free of cost. One can even use them without paying any penalty. The loan against property calculator works on three inputs provided by the loan borrower. These are:
1. Principal or the Loan Amount: When it comes to loans against property, the LTV ratio can go up to 75%. In other words, borrowers can borrow up to 75% of the pledged asset’s net value as collateral. However, borrowers must avoid taking on the burden of loan EMIs that exceed their income and repayment capacity. A good idea is to always borrow how much you need and not how much you are eligible for.
2. Property Loan Interest Rate: The loan against property EMI calculator also requires borrowers to enter the property loan interest rate they have been offered. Lenders decide the interest rate after taking into consideration the loan applicant’s credit score, income, job stability, debt-to-income ratio, LTV ratio, etc. Borrowers must always try to secure mortgage loans lowest interest rates to get affordable EMIs and experience a hassle-free loan repayment process.
3. Loan Tenor: Lastly, the mortgage loan calculator will also ask you to enter the number of years you need to repay the loan. Many people make the mistake of opting for a short loan tenor even when their income does not permit the ensuing loan EMIs. They opt for a short tenor to reduce their total interest outgo as well as become debt-free as quickly as possible. Borrowers must choose their loan tenor carefully. It is better to pay slightly higher interest and pay off your mortgage loan without feeling burdened than to opt for a lower loan tenor and then miss paying loan EMIs. Missing loan EMIs not only increases the total cost of borrowing but also affects one’s chances of availing of a loan in the future.
Once a borrower enters these three details, the loan against property EMI calculator takes only a few seconds to calculate the loan EMIs that they will have to pay for their desired combination of loan value and loan tenor. Further, the calculator will also give them the total interest they will need to pay on their loan along with the total cost of borrowing money. Through the property loan EMI calculator, borrowers will also be able to access the loan amortization schedule, which is essentially a breakup of all the loan EMIs and how they will be divided and diverted each month to cover the principal and interest components of one’s loan.
Planning Your Finances with a Loan Against Property EMI Calculator
Here’s how a loan against property EMI calculator can help you plan your finances and experience a hassle-free loan journey.
1. The loan against property EMI calculator is quick and accurate. It delivers results within a fraction of a second. Thus, loan applicants can use this online tool to compare different loan offers and figure out the EMIs that one would have to pay for each different combination of loan value and loan tenor. These comparisons cannot be made manually for manual calculations not only take time but are also prone to errors.
2. The loan against property EMI calculator makes it possible for individuals to ascertain the affordability of a loan. Simply enter your desired loan amount, loan tenor and rate of interest. If you find the loan EMIs on your screen affordable, go ahead and apply for the loan. However, if you feel that the loan EMI you see is unaffordable, try other combinations of loan value and loan tenor until you arrive at affordable and easy-to-pay loan EMIs.
3. The loan against property calculator tells you your loan EMIs even before you have applied for a loan. This makes it possible for loan borrowers to do monthly budgeting and financial planning. When you know the EMIs you have to accommodate, you can move things around in your monthly budget and do away with the unnecessary expenses to make sure you can afford your new EMI obligation.
4. Lastly, if becoming debt-free is high on your list of priorities, use the amortization schedule provided by the property loan EMI calculator to figure out the ideal time for prepayments and foreclosure.
In conclusion, the property loan EMI calculator is a handy online tool that all individuals applying for a property loan can use.
