It is vital to evaluate your home loan eligibility before you begin with your application process. Understanding it will assist you to manage your finances well and ensure timely repayment of your EMI without putting any burden on your budget. Home loan affordability can easily be checked through an online home loan affordability calculator. Most of these online calculators come with boxes or sliders containing distinct parameters that impact your home loan eligibility. Such parameters might include home loan interest rate, age, down payment, gross monthly income, repayment tenure, other EMIs etc.
Just like before purchasing a property, you factor in your finances, home loan calculator also uses similar information to compute your affordability. It examines the info entered by you to reveal the following:
- Loan amount you are eligible for
- Property cost as per your affordability
To compute your home loan affordability, you must input the listed details:
- Your monthly income
- Other important EMI that you may have
- Expected rate of interest on property you are looking to buy
- Repayment tenure which you are willing to avail
- Down payment as per your affordability
For instance, assume, a 35-year-old individual earning a net adjusted monthly income of Rs 60,000 with other loan EMIs of Rs 8,000, and accumulated down payment of Rs 2 lakh. If the offered interest rate is 7 percent p.a. and loan repayment tenure is 20 years, then the loan proceeds that they are eligible for would be up to Rs 18 lakh. The benefit of using the home loan affordability calculator is you can easily narrow down your property search as per your budget. Also, you can organise your finances in a better way if you are aware about the EMI figure as per your repayment capacity.
Beside these, there are other benefits that home loan affordability calculators offer. These include:
Simple to use: Affordability calculator is simple to use, which is designed to allow you to assess your home loan eligibility. Note that to use the calculator, you just require placing the required details and the outcome will be displayed in a second. For using this calculator, no advanced financial knowledge is required.
Free: You do not require paying any charge for using the calculator. In fact, you can use the calculator as many times as per your need.
Requires minimal info: Affordability calculator asks for zero additional info. You just require providing some basic details and based on that the calculator provides you the result.
Time saving: An affordability calculator saves ample time. This is because you do not require visiting the lender to discuss the loan interest amount or to see if you can afford the home loan. Instead, you can get the data from the comfort of your home through an online home loan affordability calculator.
Makes your financial planning simple: This calculator lets you know the eligible loan amount. Also, it enlightens you about the amount you can afford for purchasing your home linked expenditures and income. Once you get the figures, you can easily plan out your finances and examine the property type you must approach.
Home loan is a commitment that spans over a decade, which is the reason why you should ensure to conduct your due diligence before availing the loan. Apply for a home loan just after you have calculated the cost incurred in borrowing, your monthly repayments and the loan’s implication on your finances. For this you must use a home loan calculator.