Are you planning to get a home loan but unsure about the exact EMI you’ll need to pay? The Piramal Finance home loan EMI calculator can help determine the monthly payment amount. It lets you make informed decisions when buying your dream home and manage your monthly budget better.
With Piramal Finance, you can enjoy home loans with low interest rates and a flexible repayment period. Our Home Loan Interest Rate calculator also helps you calculate the total interest on your loan.
EMI Calculation
EMI Calculation
-
Row 1
- Principal Amount
- Tenure
- Rate of Interest
- EMI
-
Row 2
- ₹ 10 lakhs
- 10 years
- 11%*
- ₹ 13,775
-
Row 3
- ₹ 25 lakhs
- 10 years
- 11%*
- ₹ 34,438
-
Row 3
- ₹ 50 lakhs
- 20 years
- 11%*
- ₹ 51,609
-
Row 4
- ₹ 50 lakhs
- 25 years
- 11%*
- ₹ 49,006
-
Row 5
- ₹ 75 lakhs
- 25 years
- 11%*
- ₹ 73,508
What is Home Loan EMI?
EMI refers to Equated Monthly Instalment and is the amount that you need to pay your lender every month. You can calculate home loan EMI by adding the interest on the outstanding balance of your housing loan. If you want to reduce the EMI, choose a longer repayment schedule. The maximum time you can take to repay a home loan from Piramal Finance is 30 years.
How to use Piramal Finance's Home Loan EMI Calculator?
Using the Piramal Finance housing loan calculator is quite simple. You need to enter the following information to determine the house EMI:
- Loan amount (Rs.): Specify the amount that you intend to borrow.
- Duration (Years): You need to specify the duration over which you will repay the home loan. Remember that choosing a longer duration will make you more eligible for the loan.
- Interest rate (%p.a): Mention the interest rate charged by your lender.
How does EMI work?
When you take a home loan, the repayment typically occurs through Equated Monthly Instalments (EMIs), which combine both principal and interest. Each EMI is calculated to ensure that you pay off the loan over the specified tenure.
For example, let’s say you take a loan of ₹30 lakhs at an interest rate of 9.5% for a tenure of 20 years. Your EMI would be approximately ₹27,964. In the initial months, a larger portion of your EMI goes towards paying the interest, while a smaller amount reduces the principal. As you continue to repay, the principal component gradually increases, and the interest component decreases.
- Principal: This is the original amount you borrowed. Over time, as you make your EMIs, a portion goes toward paying down this principal. Gradually, your outstanding loan amount decreases.
- Interest: This is the cost of borrowing the money. The interest portion of your EMI is calculated based on the outstanding principal. At the beginning of your loan tenure, a larger part of your EMI goes toward interest. As you continue to repay, the interest portion decreases while the principal repayment increases.
This structure helps you manage your finances more effectively, as you’ll see a gradual reduction in your loan balance with each payment. To understand how your EMIs break down between principal and interest, you can use our EMI calculator, which provides a clear picture of your repayment journey.
What are the benefits of Calculating Home Loan EMIs?
The EMI calculation helps you figure out if you can afford to buy your dream home. It ensures that you know how much of your monthly earnings will go towards housing loans. Here's how EMI calculation assists in the planning process:
Budgeting
EMI calculation allows you to determine the amount you will need to pay each month towards your home loan. This helps you create a budget for your monthly expenses. It allows you to easily handle your loan repayment and other financial obligations.
Loan Amount
Calculate home loan EMI to find out the highest loan you can afford, considering your income and financial stability. This stops you from borrowing too much and struggling to pay it back, lowering the chance of missing payments.
Interest Assessment
EMI calculation helps you understand the impact of interest on your home loan. It shows how much of each payment goes to the loan amount and how much goes to the interest. Over the years, a larger portion of the EMI goes towards principal repayment, reducing the outstanding loan balance and the overall interest paid..
Loan Tenure
EMI calculation allows you to experiment with different loan tenures. Longer tenures result in lower monthly payments and higher overall interest paid. On the other hand, shorter tenures lead to higher monthly payments, but less overall interest paid. This calculation helps you strike a balance between a manageable monthly payment and minimizing the interest paid.
Prepayment Planning
If you plan to make prepayments towards your home loan in the future, home loan EMI calculations can help you understand how these prepayments will affect the loan's tenure and interest payments. You can even choose to keep your EMI constant and reduce the loan tenure by making additional payments.
Long-Term Financial Planning
Understanding your EMI commitments over the loan tenure helps you incorporate these payments into your long-term financial planning. This is especially important when considering other financial goals like retirement planning, investments, and education expenses.
How to calculate home loan EMI?
The formula for EMI calculation is as follows:
- P x R x (1+R)^N / [(1+R)^N-1]
Here,
P = Principal loan amount or the amount you borrowed (Principal Component)
R = Monthly interest rate charged by your lender (Interest Component)
N = Loan duration in months (Tenure Component)
The rate of interest on your housing loan is calculated on a per-month basis. Therefore,
R = Annual rate of interest/ 12/ 100
Suppose the annual rate of interest is 11%. Then, R = 11/ 12/ 100 = 0.009
Example
For instance, you are planning to apply for a 30-lakh home loan EMI at an interest rate of 11% per annum. Consider the tenure of your loan as 240 months (20 years). In that case, you will calculate the EMI amount using this formula:
- EMI = ₹ 30,00,000 * 0.009 * (1 + 0.009) 240 / [(1 + 0.009) 240 - 1) = ₹ 30,966
Calculating the home loan EMI manually can be extremely tedious. Moreover, you are likely to make mistakes while calculating it manually. That's why the Piramal Finance home loan calculator will aid you whenever you are wondering how to calculate home loan EMI.
What are the benefits of Home Loan?
At Piramal Finance, we understand that buying a home is a significant milestone in your life. That's why we're committed to providing you with a home loan that meets your needs and helps you achieve your dreams. Here are some of the key benefits of choosing our home loans:
- Flexible Loan Amounts Whether you're purchasing your first home or upgrading, our home loans cater to various needs, with no upper limit on the loan amount based on your eligibility.
- Long Tenure Options Enjoy extended loan tenures of up to 30 years, allowing you to spread your repayments over a comfortable period and reduce your EMI burden.
- Tax Benefits Take advantage of tax deductions under Section 80C and Section 24 of the Income Tax Act. You can claim up to INR 1.5 lakhs on the principal repayment and additional deductions on interest paid, making your investment even more rewarding.
- Quick and Hassle-Free Processing Our streamlined application process ensures that you receive prompt approvals, so you can focus on moving into your new home sooner.
- Flexibility of Repayment Many options are available when creating a home loan plan that suits your needs. Out home loan plans are designed to be flexible when it comes to tenure, prepayment, and foreclosure terms.
- Minimum Documentation To make the home loan application process easier for you, we require minimal documentation.
What is a Home Loan amortization schedule?
A home loan amortization schedule is a detailed table showing each monthly payment over the life of your loan. It breaks down how much of each payment goes towards the principal and how much goes towards interest. This helps you understand your repayment progress and plan your finances effectively. With this clarity, you can stay on track and manage your home loan with confidence!
Get Home Loan for Different Budgets
Know your monthly EMI for various home loan amounts.
Frequently asked questions
Paying a home loan EMI provides significant tax benefits under various sections of the Income Tax Act, 1961. Here's a breakdown:
Section 80C: Tax Deduction on Principal Repayment
- Maximum Deduction: Up to ₹1,50,000
- Eligibility: The deduction is applicable for the repayment of the principal portion of the EMI.
- Conditions: The property should not be sold within 5 years of possession.
Section 24B: Tax Deduction on Interest Paid
- Maximum Deduction: Up to ₹2,00,000
- Eligibility: The deduction applies to the interest component of the EMI.
- Conditions: The house must be self-occupied, and construction should be completed within 5 years of taking the loan. For let-out properties, there is no upper limit on interest deduction.
Section 26 Read with Section 24: Tax Benefits for Joint Owners
- Maximum Deduction: Up to ₹2,00,000 per co-owner (for interest)
- Eligibility: Both co-borrowers must be co-owners of the property to claim this benefit.
- Conditions: Each co-owner can claim their share of principal and interest deduction proportionate to their ownership.
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