House loan calculator

Taking a loan can win you lender’s trust

Most of us try to be careful about paying dues on time, but the strike rate is rarely 100%. Some late payments have a temporary effect, maybe a one-time fine. But there are others that have short-term as well as long-term repercussions. For example, on a home loan, if you are late in paying the installment, you have to pay a penalty and it affects your credit score in the long run.

Here are a few ways you can ensure that your score remains on the higher side of the scale.

Pay on time

If you are a salaried employee who gets her pay once in about 30 days, then it is easier to schedule loan payments such as for a Housing Loan and an auto loan. But what about those who are away for long periods, say, on a merchant ship? Or those who have seasonal employment?

Know the details

Reading the details will mean you know about grace periods, penalty rates, interest rate calculation and more. Most of this is available in the loan documents and the lender’s website. You can also call the customer service center for help.

Use credit cards wisely

This is probably one of the most common loans that people take. But it is also the least understood.

Many individuals, who have had bad experiences with this product, shun it absolutely. If you had issues with paying your credit card dues in the past, and are wary of using it again, it won’t help your credit score.

Your basket of loans

Your credit profile also depends on the types of loans, i.e., your mix of secured and unsecured loans. Secured loans are those that have collateral attached, such as a home or a car loan. If you default, the lender can take away the ‘asset’. Unsecured loans, such as credit card or personal loan, are riskier for the lender because they don’t have attached collateral.

[Source: http://www.livemint.com/Money/68QAwMldEIeKmOUwye4nhO/Taking-a-loan-can-win-you-lenders-trust.html]

Documents Needed for Home loan emi calculator

As you have made up a mind to take a home to loan buy your dream house. In today's internet world you start searching on net for best offer. Search engines will take you to the different banks and financial institution websites, which provide home loans. You should also visit websites which offer advices on home loans. From there you get the idea about best interest rates, and other important information related home loan.

After doing all the research about all the factors you apply for a home loan. But most important requirement to get Home loan emi calculator is the documentation which is quite tough. In case you miss out any crucial document your home loan approval will get delayed or may be your application will be rejected.

The first thing is the filling of application form and signing it. Then go through the official site of the bank thoroughly to get information about the mandatory documents needed for applicants. The main documents required for home loan are Proof of age Proof of identity - passport, PAN card, ration card, voter ID card etc.

Banks and financial institutions have specified documents according to the applicant's category, purpose of loan, tenure, amount, etc. From the documentation column you can check the list of documents as per your category.

Salaried applicants

Salaried persons are required to submit salary slip of last three months showing all deductions along with current salary certificate, proof of continuity in job for last two years - either appointment and relieving letters or Form 16 for two years. Bank statement or pass book where salary has been credited for last six months, copy of appointment letter if employed for less than a year in current job, company profile for employees of a private limited company.

Documents related to Property

Khata certificate Latest property tax paid receipt EC for last 13 years, parent documents and all link documents for 13 years, approved plan receipts towards payments already made, in case of an old flat or house you are going to purchase - its sale agreement and title documents in favour of the seller, if you are buying a newly constructed flat then sale agreement or construction agreement with builder, total cost break-up on builder's letterhead (in case of new flat).

To get refinance

In case of getting refinance you have to submit details of previous Home loan emi calculator availed outstanding loan balance letter with foreclosure charges Letter of acknowledgment for deposit of title deeds.

Documents for self - employed

Self employed persons have to submit additional documents to get home loan. These are profile of business on the letterhead of the company, proof of IT returns for last three years, computation of income certified by a chartered accountant along with profit and loss account and balance sheets for three years, business and personal account bank statement for last one year and copy of professional certificate in case of a professional.

One thing to take care of is marginal money since banks calculate percentage according to your income and moreover banks only lend 85 to 90 percent of the loan amount.

Usually the banks ensure that monthly repayments do not cross 40 percent of your take home salary. While scrutinizing the documents bank finds applicant has a poor repayment track record and have sufficient default record on previous debts, then there are very bleak chances of getting home loan.

Article Source: http://EzineArticles.com/1356474

How to Get Lowest Interest Rates on Your Home Mortgage

Though selling and buying properties is very ordinary, at least for those who are in realty sector, it is still a tedious and time consuming process. This happens especially if you decide to do it on your own. It is good if you have made up your mind to buy a home for your family and are ready to apply for a home mortgage in a bank. Before you do so, there are some important points to consider. It is true that getting a home loan today is much easier in comparison to what the situation was a few decades ago, it is still a once in a lifetime decision as you do not buy a property every few years, do you? It is therefore necessary to do your homework before taking a plunge.

First of all, it is imperative to know the interest rates prevailing in the home mortgage sector. Then, depending upon your requirements, you can easily calculate the EMI that you have to pay to the bank that grants a home loan to you. Now, this interest rate is dependent upon many factors, most importantly upon your credit score.

If you have a decent score, you can even negotiate with the bank to lower the interest rate in your case. However, if you have a low score, do not make a mistake of presenting your home loan application to any bank manager. This is because loan advance managers judge your credit worthiness solely on the basis of your credit score. If your loan application is rejected several times, it becomes progressively difficult for you to secure a home mortgage. This is where experienced brokers working in the field of home loans come into play.

You could actually find that there are dozens of companies working in the field of home loans and refinance. Remember, you are important to them as much as they are to you. Thus, it makes sense to compare the features of the service that these companies are providing. No, you do not need to go physically to the offices of each company. Instead, you can compare the companies from your own home by logging on to the websites of these companies. Just type the amount of money you need and the Emi Calculator Home Loan that you can realistically pay to the lender. Depending young your details, you can get the rates of interest at which these companies can get you home mortgage.

The biggest advantage that these companies have is that they can match your requirements with the best available home loan product in the market. This is something that you cannot hope to achieve on your own. You not only save a huge amount of money in terms of lower rates of interest, you also save on your valuable time and effort. Just make sure that there is no fine print behind the attractive features of the company whose services you are hiring to secure your home mortgage.

[Source: http://ezinearticles.com/?How-to-Get-Lowest-Interest-Rates-on-Your-Home-Mortgage&id=6156792]

Determine Your Ability to Pay a Loan with EMI to Income Ratio

Everyone is capable of forming a budget, of how much to should spend on home, car, retirement funds, insurances, daily expenses, and so on, and how much they should save every month. Budgeting is crucial for sustaining yourself in the long run, especially if you have something like a home loan to factor in.

You may have created your own budget and you may good at it, but did you ever wonder what would be the ideal budget for you? The 50/30/20 rule coined by Harvard bankruptcy expert Elizabeth Warren and her daughter,

Calculate Your After-Tax Income

Making a budget is all about splitting and allocating your monthly income among other commitments and expenses. Before you do anything, you need to know how much money you are really dealing with. Your monthly salary can be misleading as there will be a tax cut. Therefore, you'll need to calculate through Emi Calculator Housing Loan how much money you will have in hand to play around with after government taxes are deducted. Once that is taken care of, you will have to add back any other deductions that were made on your monthly income like health care, retirement plan charges and so on.

Limit Your Needs to 50 Percent

Needs are different from wants. You've heard this so many times and you've even said this yourself. Now it's time to look at all of your monthly expenses and pick out which ones were made for your needs. These will include cost of housing and utilities, groceries, health and car insurances. The idea here is to sum them all up, and make sure that they do not cost you more than 50 percent of your after-tax income.

If you have problems in differentiating which expense is a need and which is a want, then use this rule: If the payment has a major effect on your quality of life such as electricity or medicine, then it is a need. If not paying for something would cause minor inconveniences to you, like the cable bill, then that's a want.

Limit Your Wants to 30 Percent

Now you know what wants are. These wants are important for living a happy life and for positively motivating yourself to earn more. According to the 50/30/20 rule, 30 percent of your after-tax income should be spent on all of your desires.

Spend 20 Percent on Savings and Debt Repayments

The remaining 20 percent should be spent on repaying debts that you have or save it for your retirement or emergency account. When you are placing debts in this category such are credit card payment, categorize the minimum payment of your credit card payment as a need.

[Source: http://ezinearticles.com/?Determine-Your-Ability-to-Pay-a-Loan-With-EMI-to-Income-Ratio&id=8519504]

What Does My Emi Consist Of?

When you apply for a loan irrespective of whether it is a personal loan, home loan or car loan, the second most important (the first being the rate of interest) aspect you should consider is your monthly installment. It is called equated monthly installment since it is the same amount you will have to pay every month until you repay your loan. This system is quite hassle free, because you have to contribute only what you can afford, and not use up your entire savings or income towards repaying your loan.

Your equated monthly installment or emi is composed of two main components:

Principal amount

Interest Rate

Before we try to understand how this works, let us familiarize ourselves with some of the commonly used terms in relation to emi.

- Principal amount: the original value of the borrowed amount.

- Interest Rate: an annually charged rate by the bank

- Tenure: The duration within which the loan needs to be repaid.

- Processing Fee: a small percentage of your loan amount (less than 3%) which is towards the bank's efforts for processing the loan application.

In the initial period of repayment, your interest will constitute a major portion of your emi whereas towards the end of your loan tenure, your interest will count towards zero and your emi will majorly consist of the principal amount.

For instance, if you are borrowing a personal loan of 5 lakh value, for tenure of 3 years at an interest rate of 15%, your emi will be 17,333. In the first month, you will pay 11,083 as principal and 6250 as interest. Similarly, towards the end of the tenure, you will be paying 17,119 as principal and 214 towards interest.

The difference between flat and diminishing rates

Now, you would have used an emi calculator to get an approximate estimate about the value of emi payable every month. This is usually a flat rate of interest i.e. the rate of interest is not going to change over the tenure; naturally your emi will also stay the same for each month.

However, if you have chosen a diminishing rate scheme, then this means that your interest rate will be calculated based on the current loan outstanding at a particular point during the tenure. Naturally, once the interest reduces, so will your emi. In fact, a diminishing rate of interest gives more avenues to save up on exorbitant interest charges.

If you have taken a housing loan, then you would have come across another term called floating rate, this will change depending on the market, it is not necessary that there should be an increase all the time; there are also chances of the interest rate reducing. Keep a window of 1% to 3% variation from the current rate. When you take this into account and calculate your emi, you will be in a better position to get an overall idea of how much would you be required to pay now, and how much you might have to pay should there be a change.

Apart from the change in interest rates, when you avail part-payment or pre-closure facilities you may have to pay a separate charge for the same. You may also include these charges when you use the emi calculator.

[Source: http://ezinearticles.com/?What-Does-My-Emi-Consist-Of?&id=8229026]

Banking for NRIs: It's All About Ease

 In a globalized, networked world, where business and commerce has moved from the traditional 8 hour work day, geographies and boundaries have dissolved in the face of technologies. Post liberalization, India has moved on to a less stringent exchange regime and this has made it easier for the NRIs (Non Resident Indians) to remit funds back home.

Every year, Indians living abroad use 3 types of NRI accounts to transfer funds. It's believed that remittances from NRI's abroad to India in 2010-2011 were to the tune of 55 billion US dollars.

NRI's can operate three kinds of accounts in India. All the major Indian banks, both public sector and private offer these accounts to their customers. Online money transfer from these accounts has drastically reduced the time taken for funds to be transferred to India.

Non Resident External accounts: NRE

· Funds In these accounts are held in Rupees

· NRIs can open these accounts

· Funds from abroad can be deposited in this account

· This type of account can be held jointly

· Funds in this account can be remitted to any country without requiring prior permission from the RBI.

· Nominations can be made for this type of accounts

· The interest earned on income is not subject to income tax in India.

Non Resident Ordinary accounts: NRO

· This account can be opened by an NRI or even a resident before becoming an NRI

· NRO accounts can only contain funds received in India

· The funds cannot be remitted abroad of to another NRE account

· NRO accounts can be held jointly by a resident and an NRI

· Interest earned on deposits in an NRO account is taxable as per prevailing rates in India

Non-Resident Foreign Currency Account: FCNR

This allows NRIs/PIOs to invest in deposits in India, in foreign currency. The idea is to protect the NRIs from fluctuations in the exchange rate. Currently FCNR deposits can be maintained in 6 currencies.

· US Dollars $

· Euros €

· British Pounds £

· Australian Dollars

· Canadian Dollars

· Japanese Yen ¥

FCNR accounts are an attractive way for NRIs to get a good rate of interest on their deposits.

· They can only be opened by NRIs

· The term is between 1-5 years

· These accounts can be held jointly

· Nomination facility is available

· Home Loan India can be availed against these deposits; however these loans are restricted in their use and amounts, by the law.

· The interest earned on the deposits is not taxable in India.

· The principal deposit is not taxed as Wealth Tax in India

· An overdraft of upto 90% of the deposit or Rs 1 crore, whichever is more, is generally given to a FCNR account.

[Source: http://ezinearticles.com/?Banking-for-NRIs:-Its-All-About-Ease&id=6899594]

Tax Benefits Associated With Housing Loans

Multiple benefits - how?

EMI (elementary monthly installments) consists of two parts - the interest portion and principal amount. Interest paid is allowed as a tax benefit under section 24(b) (subject to restrictions), while the principle amount repaid is allowed as a deduction under section 80C.

Maximum ceiling on tax benefit

Maximum tax deduction for repayment principal component of home loan can't exceed

Rs 1, 00,000 under section 80C. One should keep in mind that other investments/contributions are also allowed as a deduction under section 80C, and this limit of Rs. 1,00,000 applies to all of them put together.

Housing loan interest deduction, on the other hand, is allowed up to a maximum amount of Rs 1, 50,000 under section 24(b). However, the acquisition or construction of the house property should be completed within 3 years from the end of financial year in which loan was taken; otherwise, the amount of interest benefit allowed is only up to Rs 30,000.

Furthermore, the above tax deduction limit u/s 24(b) is applicable only for self-occupied house property. In case of let-out or deemed to be let out house property, interest is deductible without any limit.

Starting date for claiming tax benefit

Some say that deduction on principal component of home loan under section 80C is allowed as soon as one starts repaying the home loan. Some say deduction is allowed only once the construction is completed. The law isn't clear on the matter; hence the ambiguity remains.

Interest deduction on house loan under section 24(b) is allowed only on acquisition or completion of the house property. However, interest deduction for pre-acquisition or pre-construction period is also allowed but only after acquisition or construction is complete. It is allowed in 5 equal annual installments. But even after including the above, the total deduction should not exceed Rs. 1, 50,000 per annum.

Source of home loan

Unlike section 24(b), Section 80C doesn't allow tax deduction for home loans taken from friends and relatives. For claiming tax benefit on principal component of the home loan under section 80C, you need to borrow only from the lenders specified in that section. There is no such restriction under section 24(b) of the IT Act for claiming tax benefit on interest component of the housing loan.

Purpose of housing loan - Home purchase / construction vs.

Home improvement Deduction under section 80C for principal portion of the housing loan EMI is not allowed if the home loan borrowing is for the purpose of reconstruction, renewal or repair of house property. Put simply, tax benefit under section 80C is only allowed for buying or constructing a new home. In contrast, deduction for Interest is allowed under section 24(b) even for the loan taken for the purpose of repair, renewal or reconstruction of existing house property but subject to the limit of Rs 30,000 in case of self-occupied house property. In case of let out house property, actual interest is allowed without any ceiling.

Payment Basis - Due Basis vs. Cash Basis

Tax benefit u/s 80C can be claimed only when the actual payment is made. Interest deduction u/s 24(b), on the other hand, is allowed on accrual or due basis. Put simply, unlike principal portion, interest deduction can be claimed even if not paid.

[Source: http://ezinearticles.com/?Tax-Benefits-Associated-With-Housing-Loans&id=6743691]

Home Loans are Tax Friendly

For most Indians, owning a house isn’t just an investment but pride. ‘Home- Sweet-Home’ is tailored by your tastes and relationships. It is the space of your absolute freedom. Everyone dreams of owning a house but certainly have misconceptions about it. The real-estate boom in India is attracting foreign investors too in this sector. Choosing a flat/property to your tastes is easy because you decide. But, one requires a little financial know-how before planning for it.

With the rise of housing finance institutions, owning a house is now pocket-friendly with a home loan. With the advent of selling flat/property online, the segment has become more competitive but to the convenience of the consumer. Though buying a house is an expensive proposition, growing real estate prices made almost impossible to own a house without a home loan. The home loan is such a credit facility where interest rates are cheaper and tenure is longer. Not only that, it comes with exciting tax benefits too while income tax filing.

The amount that a bank can lend is up to 80% of the property value. This depends up on various factors to check the eligibility. Banks are strict with these checks and otherwise bad loans can become burden for them. Every lender tries to ensure the borrower’s capacity to repay the equated monthly installments (EMIs) in time and repay the principal amount. To do this, they would look up to your credit history, current assets, liabilities and other financial details.

Tax Planning:

The biggest benefit in availing home loan is that one can plan their tax savings after considering all deduction benefits while filing I.T.Return. All home financing companies including banks usually give a provisional certificate at the start of the year which is based on EMIs and break up of principal and interest. This certificate will give you a fair indication of how much principal has to be repaid and how much interest has to be paid for that year. Based on this, you can plan for other investments. At the end of the year, you will get an original certificate based on the actual EMIs paid for that year. This certificate has to be submitted along with the income tax returns to claim the deduction.

Let us now dwell upon various tax benefits on availing home loan:

Any home loan will have two components in it namely, principal and interest. While income tax efiling one can get tax benefits through home loan under two different Sections of Income Tax Act.

Under Section 24– Deduction on interest on home loan for self-occupied property up to Rs 2 lakh.

Under Section 80C– Deduction on repayment of principal amount on home loan up to Rs 1.5 lakh.

Deductions in both components of a home loan are therefore governed by two different sections of the same Income Tax Act.  If the above sections are expanded in detail:

Tax benefit on Principal Amount:

The amount paid as repayment of Principal Amount of home loan by an Individual/HUF (Hindu Undivided Family) is allowed as tax deduction under section 80Cof Income Tax Act while filing I.T.Return. The maximum tax deduction allowed under Section 80C is Rs. 1, 50,000. (Increased from 1 Lakh to Rs. 1.5 Lakh in Budget 2014). The Amount paid as stamp duty & registration fee is also allowed as tax deduction under Section 80C even if the loan is not taken. However it is important to note that tax benefit of home loan under this section for the repayment of principal part of it is allowed only after the construction is complete and the completion certificate has been awarded. No deduction would be allowed for under construction properties.

Tax benefit on Interest Amount:

Tax Benefit on Home Loan for payment of Interest is allowed as a deduction while filing income tax return under section 24 of Income Tax Act. As per Section 24, the income from house property shall be reduced by the amount of interest paid on home loan where the loan has been taken for the purpose of Purchase/ Construction/ Repair/ Renewal/ Reconstruction of a Residential House Property.

The maximum tax deduction allowed under Section 24 of a self-occupied property is subject to a maximum limit of Rs. 2 Lakhs (increased from 1.5 Lakhs to Rs. 2 Lakhs in the 2014 Budget). In case the property for which the Home Loan has been taken is not self-occupied, no maximum limit has been prescribed in this case and the taxpayer can take tax deduction of the whole interest amount under this section.  This is the best part of it because you can avail the same benefit upon all interest paid if you rented your house without you (owner) residing in it.

Using the above sections to the most of our benefit, the following opportunities can be explored:

Taking a joint loan- One can avail home loan with co-borrower as spouse, if working. All benefits under sections 80C and 24 of Income Tax Act can be enjoyed for each borrower. If you take home loan under 50:50 ratio, the overall tax savings of the household can be increased. The spouse earning more should have more portion of the loan to avail maximum benefits.

HRA (House Rent Allowance) Benefit- If you stay in a rented house and paying rent and at the same time availed a home loan for your own home, you can avail benefits of both HRA and home loan. This is subject to your home receiving rental income which is taxable.

Interest Rates on your home loans:

RBI has maintained status quo in the first policy of this financial year and the governor insisted upon monetary transmission of benefits of previous repo cuts.

Many banks have reduce their loan rates by almost 25 basis points as a result of which an interest rate war has triggered which will soon be followed by other lenders too. Most lenders at present can offer home loans at 9-10 percent. This competition would benefit home loan consumers, who have been struggling under high EMIs for years. As inflation is under control, one may expect more rate cuts in near future.

            One can apply for a home loan online with all end to end assistance in documentation and consultation process. To avail home loans hassle free and get best quotes, calculate your EMI’s visit: home loan emi calculator

Miscellaneous Charges of Home Loans

It is a well-known fact, that one takes a Home Loan only once or twice in his/her whole life cycle. Hence, however, well read one may be, it is well near impossible to understand the detailed implications of Charges involved in taking a Home Loan.  There are various charges one has to pay at each stage of a Loan from Application to Loan Disbursement. And well, the charges do not stop there, as even after the Disbursement, there are various other charges that one has to cough up. Read on to know them as the Banks/NBFCs Never highlight them to the Potential Borrowers.

At the time of Loan Disbursement, You are handed over a Booklet containing the list of ‘Terms & Conditions’. The Borrower signs it immediately so as to get the much awaited Loan Amount Cheque in hand. Later, even after having read this list of ‘Terms & Conditions’, the detailed meaning of the fine prints are mostly not understood.

It is only later, when you approach the Lender to Cancel Disbursement, Change Rates, Make Prepayment/Foreclosure etc. that you understand the Implications of the fine prints of the ‘Terms & Conditions’ when you have to Cough Up Certain Fixed Charges for each one of them.

Charges:  Up to Home Loan Disbursement

1. At The Time of Loan Application. Loan Processing Fees up to 0.5% of the Loan Amount or Rs 2,000 whichever is higher plus Taxes and Statuary Levies and Charges, as may be applicable from time to time.

2. At The Time of Loan Application (NRI Loan). Loan Processing Fees up to 1.25% of the Loan Amount or Rs 2,000 whichever is higher plus Taxes and Statuary Levies and Charges, as may be applicable from time to time.

3. Loan Application Cancellation. Forfeiture of Processing Fees, Taxes and other Statuary charges paid.

4. Loan Sanction: Re-Appraisal after 6 Months. Processing Fees of Rs 2,000 for Re-Application plus Taxes and Statuary Levies and Charges, as may be applicable from time to time.

5. Loan Disbursement Fees. (SD/MOD/MOE)

6. Loan Cheque Disbursement Cancellation. Up to Rs 500 plus Taxes.

Charges:  After Home Loan Disbursement

1. Switching Charges.

(a) To Variable from Fixed Rate. Conversion Fees up to 0.5% of Balance Principle Outstanding and Un-disbursed Amount (if any) or a Cap of Rs 50,000 plus taxes whichever is lower.

(b) To Lower Rate from Variable Rate. Conversion Fees up to 0.5% of Balance Principle Outstanding and Un-disbursed Amount (if any) or a Cap of Rs 50,000 plus taxes whichever is lower.

2. Pre Payment Charges/ Foreclosure.

(a) Fixed Rate & Floating Rates.  No charges, if paid from own sources (Own Sources does not Include Loans borrowed from other Banks/NBFCs).

(b) Combined Rates of Interest.

(i) During Fixed Period. 2% of Loan Amount plus Taxes and Statuary Levies and Charges, as may be applicable from time to time on the outstanding amount being so prepaid.

(ii) During the Variable Period. No prepayment charges.

Home Loan Miscellaneous Charges.

(a) Increase/Decrease in Loan Term. Rs 500 plus Taxes and Statuary Levies and Charges, as may be applicable from time to time.

(b) Delay Payment Charges. A Maximum of 18% per annum.

(c) Cheque/ECS Dishonour . Rs 200 per dishonor.

(d) Photocopy/List of Documents. Up to Rs 500 plus Taxes.

Conclusion:

Banks offer loan for home at various Rates of Interest. In most cases they DO NOT explain the meaning of fine prints that are printed in the list of ‘Terms of Agreement’ in detail. The Borrowers only come to start understanding the implications of the fine prints of the ‘Terms and Agreement’ when they approach the Lender for Cancellations/Changes in Rates/Prepayment/Foreclosures of Loans etc. and are asked to cough up certain charges for each one of them. Therefore, it is pertinent that the Borrowers understand the Detailed Implications of the Home Loan Interest Rates and avoid unforeseen/unplanned charges.

Source: http://www.articles.seoforums.me.uk/Europe-UK-US-Article/miscellaneous-charges-home-loans

emi calculator housing loan

If you can dream about owning a house, you can surely own it! With the right kind of knowledge about the home loan product it can be quite fun and exciting experience. Today, there are lots of government and private sector banks & finance firms that offers customized forms of home loans to their clients. People can approach these banks and private financial firms to get the best deals on home loan interest rates and other processing charges. It is obvious that owning a house means lots of pros and cons associated with it before finalizing a bank. When you visit a bank or an agent they will ask you to purchase a home loan,  with protection cover or other protection commodities along with housing finance. They will assure you that it will be added to your loan amount or at times an individual is completely clueless on how much loan amount he or she needs on the grounds of place for living, income source, building or society requirements, interest rate applicable, EMI to pay, etc. They feel like lost in a sea of confusion without the right form of knowledge. Relax! Finding the right home loan amount and understanding various jargons & terms associated with it is quite easy with the help of home loan EMI calculators offered by banks & firms online. Here are some tips that will help you find the right home loan in an easy manner:

Today, India’s leading private sector banks & firms are offering housing finance with new structure of loans that are developed to meet the needs of house buyers from every section of the society. However, before choosing a particular loan, it is very important to have a comprehension about the most important constituent of the loan – the EMI (Equated Monthly Installment). An EMI is a certain amount of money that an individual pays to the bank as pre-decided in the terms & conditions of the loan policy towards obtaining the legal possession of the house in near future. It is paid each calendar month, to the lender, for clearing their outstanding loan.

Your home loan EMI is calculated based on three things: Enter your home loan required amount, choose an interest rate applicable by home loan provider and select the tenure you wish to repay loans. Once you enter these details your calculated EMI amount along with interest applicable will be displayed for your information.

The home loan EMI calculator helps you understand the regular EMIs applicable on your housing finance. These calculators help you cut down the hassles of usually tedious and time consuming manual calculation of EMI applicable on your home loan. It is simplified and loaded with all the essential data, including amortization details and the ability to alter components like interest rates and tenure to try other types of permutation and combinations. This will help you make the conditions of repayment feasible as per your requirements. The most important benefit is you can plan your budget well in advance and keep aside the monthly EMI amount towards your housing loan.

While using emi calculator housing loan individual should consider charges applicable like processing fees of the loan, pre-closure charges, type of interest rates (fixed or floating basis), etc. Each EMI of the loan amount pays a part of the principal that you owe to the bank along with the decided interest rate on it. Banks and financial firms, have a certain mathematical formula to calculate the EMI based on loan amount, interest applicable, your income sources and other important details.

For a given loan amount, tenure and interest rate, the EMI calculated and the amortization schedule offered by banks and private financial firms will be similar. The pattern of reduction of principal amount through payment of each EMI will follow a similar trend across all financial institutions. Also, individual should note that the initial EMIs contribute more towards payment of interest due as compared to the principal amount. As the tenure progresses, subsequent EMIs will clear off the principal amount. Thus, by paying each EMI to bank you get an inch closer towards clearing off the debt and owning your dream home forever.

Source: http://homeloanemicalculator.tumblr.com/post/146938162180/emi-calculator-housing-loan

home loan emi calculator

The first and the most important strategy to negotiate your interest rate on home loans is to constantly update yourself with what different lenders are offering.

At present, customers have a plethora of options available from banks and financial institutions with regards to home loans and their interest rates. Today, banks and financial institutions also offer flexible interest rates for different income categories. Here's a few tips to negotiate your interest rates on home loans:

Information:

The first and the most important strategy to negotiate your interest rate on home loans is to constantly update yourself with what different lenders are offering. One should check both the fixed and variable home loan rate and then compare the two against each other. Figuring out the loan eligibility on the basis of information collected from agents is another crucial pre-requisite before deciding to opt for a home loan. Such discussions also help consumers in deciding relevant issues such as type of interest rate tenure, other charges etc. Exercises like this will also protect the borrower from getting misled by lenders who often use various jargons to lure customers.

Having all the information you require can also be useful for someone who has already availed a home loan. It will help him/her learn if they are paying an extra amount and also if another bank or financial institution could provide a better rate. The facts on the rates offered by different banks and financial institutions will help the borrower discuss the situation with more authority and this may further lead to the lender agreeing to a better rate for the existing home loan. This helps as from a lender's point of view it is easier to retain an existing customer than to get a new one.

One could also opt for a balance transfer in case another bank or financial institution is providing a better rate, but such a decision should be taken only after weighing all the pros and cons. The borrower should get a clarification from the new prospective lender on all start-up fees involved with refinancing the existing home loan besides asking the existing lender to explain the costs involved in paying out the loan. The transfer process should only be initiated after there is a clear indication that the move will save money.

Credit score:

In today's time, a good credit score helps the borrower negotiate his/her loan and interest rate, processing fees, pre-payment penalty and all the other charges involved while purchasing a property. Most banks and financial institutions believe that customers with a sound credit rating are less likely to default on the loan amount. Borrowers with salary accounts or credit cards can also avail further discounts on processing fees and prepayment penalties from banks.

In case one has a poor credit score certain steps should be undertaken to help set things right. One could take start making payments, whenever due without delaying them any further, by not utilizing the maximum limit on your credit card , pay off any debt etc.

Documentation:

There is no substitute to effective documentation while availing home loans. This gives banks the confidence about the borrower's credibility and repayment capacities thus helping in securing loans. The document filing is also an important step in this process as it is highly unlikely for a bank/lender to offer a best possible quote until the documents are submitted. One must be completely honest about existing debts, credit cards, and repayment history to all lenders to give a clear idea about their existing financial position. This will also help individuals to negotiate home loans better by enhancing their credibility as banks will also check the same with the Credit Bureau about the credit worthiness of the individual.

Another important point to keep in mind before availing a home loan is approaching prospective lenders only after the property is finalized and disbursement is required in the next few days. Most lenders are interested only in disbursements and reserve their best rates only for immediate disbursement cases.

Time your loan:

Borrowers should look at timing their loans towards the end of the month or quarter for better rates. Banks and financial institutions have pre-defined sales targets for its staff towards the end of the month/quarter and may offer competitive rates to complete their targets.

One should also look at timing their loans towards the festive season as lenders tend provide incentives in terms of lower interest rates and processing fees during this period to encourage sales.

Larger customer:

Bundling loan requests with friends & relatives to offer a larger business opportunity to banks and financial institutions is another tactic one can use for negotiating home loan rates. This is possible as banks and financial institutions would be saving on their legal and technical costs relating to property title, valuations, etc.

Conclusion:

Getting a home loan is becoming a hassle free/simple procedure with financial institutions increasingly focusing on shortening the entire process. Lenders are giving applicants an option to fill the application form online besides providing on-ground assistance of home loan advisors to assist them. With the increasing competition, financial institutions may go all out to offer home loans at competitive rates and make the entire process simple, but customers should sign up for home loan emi calculator only after ensuring that they are getting the best deal from their financial institution.

Source: http://www.articles.howto-tips.com/HowTo-Article-Directory/loan-requests-better-home-loan-rates