11 MAY, 2022

When you apply for a home loan, it’s essential that you have an idea of what your Equated Monthly Instalment (EMI) obligation is going to be. Your EMI is how you pay back the loan amount you borrowed along with the interest charged on it. Since home loans are long-term commitments, your home loan EMIs are going to be a constant and significant part of your monthly expenses for a long time as well. Hence, it’s important to apply for a home loan in such a way that your EMI amount is something you can comfortably pay regularly. To assess this, you can make use of Kotak’s home loan calculator. With this helpful tool, you can get an idea of what your EMI obligation will look like once you avail the home loan. This allows you to financially plan for it and look for homes within the right budget. But when using the calculator, it is imperative that you are aware of the below tips.

Here’s how you can ensure accurate EMI calculation

Kotak’s home loan EMI calculator is a free, online tool that you can access easily to determine your home loan EMI. You need to enter three inputs – your home loan requirement, the estimated home loan interest rate, and tenure. After you do this, you will get your EMI amount calculation within seconds. But here’s what you need to keep in mind to ensure accurate EMI calculation:

  • Your home loan requirement means the amount of home loan you want to apply for. Here, you should consider a few important things such as your repayment capacity, the down payment amount you have saved, your existing debt, etc., along with the cost of homes you are looking at. This will help you arrive at a home loan amount that you are likely to get approved for. In fact, to arrive at this number, you can make use of another helpful online calculator – Kotak’s home loan affordability calculator.

  • All financial institutions have a benchmark for home loan interest rates below which they won’t give out home loans to anyone. That is the minimum home loan interest rate. However, it’s not necessary that you get approved for that interest rate. Hence, when you input the home loan interest rate, remember that it is only an estimate and that the actual rate may differ based on your financial profile.

  • When entering the home loan tenure, you should understand how that impacts your EMI amount and interest outgo. A longer loan tenure would mean lower EMIs, which would make it more convenient for you to pay your dues. However, the longer the loan tenure, the higher is the interest outgo. Hence, you should choose a loan tenure accordingly.

Other helpful calculators

When applying for a housing loan, there are several factors you need to consider and expenses you need to account for. When you have an idea regarding these numbers, it helps make the whole process less overwhelming and gives you a greater sense of control. Hence, you can make use of a range of other Kotak calculators such as stamp duty calculator, home loan tax benefit calculator, and home loan eligibility calculator.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.