Business Finance

A Guide for Making the Best use of a Calculator for Home Loan


Computing Equated Monthly Instalments for various combinations of the loan amount, tenor and interest rates manually can be highly time-consuming. It also turns out to be a complicated process and prone to errors. On the other hand, a calculator for home loan is a highly user-friendly tool for computing EMIs anywhere and anytime in just a few clicks.

Formula for calculating home loan EMI

The formula for calculating home loan EMI is given below:

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


P defines principal amount, R refers to interest rate calculated on a monthly basis, and N determines the length of loan tenor.

How to make the best use of a home loan EMI calculator?

Before going into the steps to use a for a home loan in the best possible way, it is imperative to know all fields present in this tool and how they affect home loan EMI.

  • Principal – Principal can be defined as the amount that a loan applicant borrows from a lender. This is directly proportional to the EMIs. Therefore, the lower the principal loan amount, the lesser the monthly instalments and vice versa.
  • Loan tenor – Loan tenor refers to the time within which an applicant needs to repay a home loan. This parameter is inversely proportional to the loan EMIs. The longer the loan tenor, the lesser will be the EMIs. However, a longer loan tenor implies a higher interest outgo.
  • Rate of interest – Home loan interest rate refers to the rate at which a lender extends the loan. This rate is directly proportional to the value of the EMIs.

How to compute EMIs using a home loan calculator?

Computing EMIs using a calculator for home loan is very simple. Applicants simply need to visit the website of the concerned financial institution and look for this calculator. Enter the value or amount corresponding to the principal, loan tenor, and rate of interest. Most websites feature a slider that can be adjusted to input values into the calculator.

After inputting all values, this calculator will compute EMI in an instant and display the result on the screen. If you seek a home loan, do remember to check your home loan eligibility besides using this calculator.

Why use an online home loan calculator?

There are several benefits of using a home loan EMI calculator. Some of them are illustrated below:

  1. It is highly user-friendly. An applicant need not be tech-savvy to use this calculator in the best possible manner. All one needs to do is enter all data in the respective fields, and this calculator does the rest.
  2. A home loan calculator helps an individual make an informed decision regarding choosing the loan amount and tenor. With this tool, you will get to know how much home loan EMI you can afford.
  3. This tool helps individuals draw a comparison between different loan offers. This enables them to choose the most suitable loan offer
  4. A home loan EMI calculator helps properly manage loan repayment as it makes a user know about the EMIs payable beforehand. Responsible loan repayment helps to boost a borrower’s credit score and opens doors for several offers. 

For instance, financial institutions provide pre-approved offers, which help in simplifying and accelerating the application process. These offers are provided on various financial products like loans against property, housing loan, and more. Individuals can check their pre-approved offers by providing a few details, such as their name and contact number.

Thus, applicants must consider using a calculator for a home loan before acquiring a loan. This will prove to be highly effective in servicing a loan punctually.

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