A home requires regular maintenance and repair to keep it in great shape. But adding space to your existing property or extending it to keep up with your growing family requires a substantial amount of money. Having a home loan that serves as a home extension loan can be of immense help in such situations.
You may want to add room for your children, extend extra space into a guestroom or even expand your living space to ensure your family is comfortable. It can be a good idea to take a home extension loan at attractive prices that can be easier on your pocket, rather than putting down a significant amount of capital, at one go, towards expansion or extension costs. Knowing how much EMI you need to pay when taking a home extension loan can be crucial in deciding how to proceed with the loan. In that regard, using a home loan EMI calculator for a home extension loan can be largely helpful.
The lending institution calculates the home extension loan EMI based on the principal amount, loan tenure, and interest rate. During the beginning years of the loan, a large portion of the EMI would include the interest payable rate.
This is because the principal loan figure is often a considerable sum of money. Over a period, as the loan matures, the interest component would come down as the principal amount begins to increase.
The formula used to arrive at the home extension loan EMI is:
EMI = [P x R x (1+R) ^n] / [(1+R) ^ n-1]
P = Principal Loan Amount
R = Rate of Interest
N = Number of Monthly Instalments
Let's understand this formula better with an example. Assuming Mr X takes a home extension loan of Rs 30 lakhs at a 9% interest rate per annum for the duration of 180 months.
Using this formula, the EMI amount Mr X has to pay each month is Rs 30,428.
Manually employing the formula can be time-consuming and may result in an error. This is where the online home extension loan EMI calculator comes into play. It instantly calculates the EMI based on the variables entered into the calculator. Besides, you can use the calculator without limit and at any time or day to receive error-free, precise calculations in seconds.
How to Use a Home Extension Loan EMI Calculator
All you need to do is enter the principal home loan amount you wish to obtain. Also, add in the duration of the loan or its tenure and the expected interest rate in the boxes specified. The home extension loan calculator will instantly calculate the EMI amount and give you an approximate idea of your monthly outflow that will go towards repaying your home loan.
Here are some of the many advantages of using a home extension loan EMI calculator.
1) You can calculate your loan EMI with ease through the simple, easy to use interface and design.
2) It can help you to make an informed decision about buying a new house.
3) Using the home loan EMI calculator can help you plan your cash flows to service your home loan.
4) Using the calculator can help you estimate the loan amount you can avail of and further assess your own contribution and the cost of the home extension.
5) You can keep changing the loan amount, interest rate and loan tenure to arrive at an ideal EMI amount you can afford to pay each month.
6) It helps you see the options you have at hand and what you can actually budget each month to plan your monthly finances.
7) Knowing your home extension loan EMI in advance can help you to know how much you may want to borrow on your home loan.
8) It also helps you decide whether you need to opt for a long-term or a short-term home loan.
9) The home extension loan EMI calculator will be instrumental in helping you find out how much you can contribute towards your home down payment.
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It is a simple and easy-to-operate calculator that works as a financial planning tool for your home extension interests. It helps you calculate the home extension loan instalment, also known as your EMI, towards the home extension loan.
To calculate your EMI each month, you will need to enter the following information:
Enter the figures in the appropriate boxes and click the calculate button. You will instantly receive the EMI monthly breakup.
The home loan EMI calculator can provide you with a clearer understanding of the amount you need to pay towards your EMIs. It helps you make an educated decision about the outflow towards your home loan each month.