What is a Home Loan Calculator – A Detailed Guide

Do you remember the time when you used to save your pocket money to buy a toy from the corner store? You used to first ask for its cost, and then accordingly save every month to finance your toy. Wasn’t it easy to save when you knew exactly how much money you needed? 

A home loan calculator does the same for you, when you have to buy your dream home by availing a loan. It breaks the total cost of the home loan into monthly installments called EMI and tells you precisely, how much you need to pay every month. 

What is a home loan calculator?

Home loan calculator or Home Loan EMI calculator is an online tool that helps you determine your EMI, interest payout and total loan repayment basis the information you provide. You only need to enter the value of the loan you wish to avail, a loan tenure and the expected interest rate. If you are not happy with the results and the EMI value is too high, you can make changes in the calculator to reach an EMI value that matches your cash flow. If you want to lower the EMI amount, you can increase the loan tenure and vice versa. 

How does it work?

The home loan calculator works as per the mathematical formula of EMI calculation. 

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]


EMI- Equated Monthly Instalments

P- Principal amount

R – the rate of interest divided by 12 

N- loan tenure

Though you can use the above formula to find your EMI manually, it could be tedious and any small error could lead to wrong results. Instead, a home loan calculator is an easy and faster way of determining your home loan EMI and interest payouts. 

Benefits of using a home loan calculator

Easily available & free of cost – A home loan calculator is easily available on any financial institution’s or bank’s website and that too free of cost. You just need to visit the website, enter the values and see the EMI payouts. 

Accurate and fast Unlike manual calculators, where there are chances of errors and mistakes, a home loan calculator is accurate and fast. As soon as you enter the values in the calculator, the results are displayed instantly. 

Helps in financial planning – A home loan calculator helps you with financial planning. You can make your budget by allocating funds for your EMI and then manage other expenses if needed. It would also help you decide the loan amount needed as per your financial capacity.  

Prepares you for the loan – An EMI calculator helps you understand all the aspects of your loan even before taking the loan. It helps you be prepared for the loan and manage your cash flows in a better way.

Helps you in making informed decisions – Using a home loan calculator also helps you decide if you should opt for a short tenure or a longer one or how much you should pay as a down payment.  

How to use the home loan calculator?


  • Visit your lender’s website and search for home loan calculator. 
  • Enter the values like the loan amount, tenure and expected interest rate in the space provided
  • The results will be displayed instantly
  • If you want to alter your EMI, you can make changes in the calculator and make an informed decision as per your repayment capacity.

A home loan calculator is an easy tool that helps you determine various aspects of your home loan. With a home loan calculator, you can plan your finances better without the hassle of visiting different bank branches and without the need to carry out several calculations manually.

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