Purchasing a house is a challenging task, and it needs careful decision-making. You need to think about sources of finance for purchasing a house. Availing a home loan is a lucrative opportunity for new home buyers for funding the purchase. However, the expected home loan EMI calculation is essential before applying for a home loan at any financial institution. Prior understanding of the monthly payable amount helps the buyer to estimate the expenses. Before estimating the home loan EMI, you need to understand the basic concept and how it is calculated so that you have a clear view of the entire home loan repayment procedure. 

What is a home loan EMI?

EMI implies the equated monthly installment payable by the home loan buyer on a monthly basis. EMI is payable by the borrower for repayment of principal and interest on the outstanding amount of your home loan. 

Formula home loan EMI calculation is

EMI = P x R x (1+R)^N / [(1+R)^N-1] 

P = Principal loan amount

N = Loan tenure (in months)

R = Monthly interest rate 

R is calculated by this formula: 

R = Annual Rate of Interest/12/100

Each EMI payable over the loan has two components, such as the principal amount and the interest amount over the outstanding loan. At the beginning of the home loan approval, the interest over the principal amount used to be higher because the outstanding home loan amount was yet to be payable entirely. Over the loan period, the interest component gets reduced as you are repaying monthly EMI to reduce the outstanding principal. 

How does EMI calculation help you to make informed decisions?

The home loan EMI calculator helps you to understand the amount you need to pay as EMI for repaying the home loan within the stipulated time period. You can make informed decisions by estimating your monthly expenses well in advance. You can also compare the EMI amount payable for different financial institutions for the same tenure. 

How to use a home loan EMI calculator?

Estimating the EMI amount using the home loan calculator is a very simple and quick process. You only need to give input in the field, such as 

• The loan amount you desire to avail, 
• Loan tenure by which you want to repay the principal amount
• The interest rate applicable on your home loan

The EMI calculator will automatically display the EMI amount payable monthly considering the details provided by you. 

Why PNB Housing Home Loan?

PNB Housing provides the home loan at an attractive interest rate to the age group between 18 and 70 years. It calculates EMI based on the annual reducing balance method, where the interest rate is calculated based on the outstanding loan amount. It reduces the effective interest rate significantly. 

Use the EMI calculator for home loans for estimating the cash flow of your household income and expenses. So that you can stay relaxed and plan for your future goals wisely. The EMI calculator is an easy-to-use tool and requires simple details to predict the EMI amount. It helps you to make the right decision about availing a home loan for your dream home.