Loans against property, or mortgage loans, are secured loans in which a borrower avails of funds against a property they own. This property could be residential, commercial, or a piece of land legally owned by the borrower. While several factors affect the sanction amount in these loans, one of the foremost ones is the property’s market value. Other factors such as the applicant’s payment history, income, and business stability, among others, also affect the loan against property eligibility and interest rates.
The funds availed of through a loan against property come with end-use flexibility. Borrowers can use the sanctioned amount to fulfil various housing or business-related needs. Further, one can choose to repay their loan over a long repayment tenor, extending typically up to 17 years. However, before availing of the funds, one should assess their repayment capacity. A loan against property calculator can prove helpful here.
What is a Loan Against Property Calculator?
A loan against property EMI calculator is a free-to-use online tool that helps borrowers calculate the monthly instalments they will have to pay towards their loan against property. The calculator requires information such as loan amount, interest rate, and repayment tenor to calculate the loan against property EMI.
Manually, loan against property EMIs are calculated using this formula:
EMI = P x R x (1+R)^N / [(1+R)^N-1]
Here,
P is the principal amount,
R is the monthly rate of interest, and
N is the loan tenor in months.
Calculating EMIs manually may lead to errors – This is where the online calculator comes in handy. By using a loan against property EMI calculator, one can eliminate the need to carry out calculations manually. Let us now look at the other benefits of a loan against a property EMI calculator.
Benefits of a Loan Against Property Calculator
It Helps with Repayment Planning
Availing of a loan of any kind is a long-term financial commitment that may affect your financial expenses. Proper planning is required for comfortable loan repayment. A loan against property calculator helps borrowers estimate the EMIs they can repay conveniently.
Using the calculator, borrowers availing of a property loan can try out various combinations of the loan value, tenor, and interest rate until they arrive at a loan EMI value they find feasible. Further, once they know their estimated EMI amount, they can plan their repayment strategy, manage other expenses, and ensure they have funds to cover their loan against property EMIs.
It Saves You from Penalties
When individuals borrow what they can comfortably repay, the chances of missing out on one’s loan EMIs are reduced considerably. It also saves them from paying late fees and penalties, which may add to the total cost of borrowing. A loan against property EMI calculator displays an amortization schedule, which helps to estimate the instalment amount that they will have to pay each month based on the loan amount, tenor, and interest rate.
It Helps Borrowers Choose the Best Loan Offers
Yet another advantage of a loan against property calculator is that it helps borrowers compare loan offers from various lenders and choose the right offer for them. To avail of a loan at the most beneficial terms and conditions, borrowers may reach out to various lenders and negotiate for the best loan terms and conditions they can offer. Thus, the calculator is an easy-to-use, quick, and handy tool using which borrowers can easily compare different loan options and decide which option would be most beneficial for them.
It Eliminates Calculation Errors
When it comes to big-ticket loans, such as a home loan or a loan against property, it is better to plan the funds in advance and avoid chances of any errors in the calculation. The loan against property EMI calculator eliminates any scope for errors, which may not be the case with manual calculations. Further, the loan against property EMI calculator is free to use and one can use it anytime and anywhere.
In conclusion, the loan against EMI calculator is a beneficial tool that all loan against property borrowers can use. This tool is easily available online and you need not pay any fee to use this calculator.