There was a time when people used to save money their entire lives to finally buy a home in their 50s and 60s. A house that used to cost a few lakhs when earning is eventually purchased, perhaps at retirement, at 10-20 times that amount, maybe more. There was always a cat and mouse race between one’s savings and the property’s price. However, this all changed with the evolution of modern home loan products and changes in the real estate sector.
Now one can buy a home soon after they get their first job and start earning money. All they need to do is pay a downpayment of 20% of the price of the house, and the rest is funded through a home loan. So essentially, you buy a home first and start living in it, and you save for it later to pay the equated monthly installments, or EMIs, of the loan. This delivers two big benefits. One, you get your home at today’s price, not the price of 20-30 years from now when you have saved enough to buy a house. By the time you reach that age, the home price could have increased several times, and instead of paying that higher price, you can enjoy that price appreciation as a return on your investment in buying the home. And second, you also spend those 20-30 years living in your own home instead of moving from one rented apartment to another. So you not only buy a house, you make an investment, and you believe your peace of mind.
Home loans in today’s times
The real estate market has been going through a slump lately, which means houses are available at relatively lower prices. Moreover, with RBI keeping interest rates low, home loans are more affordable today than ever before. For example, if you take a home loan from Tata Capital, one of India’s leading home loan providers, you can get an interest rate as low as 6.9%. A few years back, home loan rates were as high as 9-10%, sometimes more.
Many homebuyers have benefitted from low housing prices coupled with low-interest rates on home loans. With most banks cutting home loan rates, banks and other financial institutions have a considerable increase in home loan disbursals. As per reports, the housing loan market in the country witnessed a year-on-year growth of 9.6 percent in the third quarter of FY21, despite the COVID-19 pandemic. Moreover, India’s home loan market is anticipated to grow at an annual rate of around 22% during 2021-2026.
Using a Home Loan Calculator
With the market environment conducive to taking a home loan to buy your dream house, you must take a step back before taking the plunge and use an available Home Loan EMI Calculator. Since a home loan is usually a considerable amount, it is a good idea to properly plan your EMIs before you decide the loan amount. For this purpose, you can use a Home Loan EMI Calculator. Using this calculator, you can accurately estimate the EMI amount you need to pay each month towards home loan repayment. The calculator will also show you the total amount of interest you need to pay during the entire repayment period.
Here is why you must use a Home Loan EMI Calculator to optimize your home loan:
Easy to Use: The best thing about using a Home Loan EMI calculator is that you need not solve any complex mathematical formulas or equations. You can just enter the loan amount, interest rate, and the tenure of your loan, and the calculator will give you an accurate estimate of the total payable interest and the monthly EMIs within seconds.
Selecting the Right Tenure: Knowing the right monthly installment amount allows you to decide the suitable home loan tenure that works for you. You can choose a shorter loan period and quickly pay off your loan if you can afford to pay higher EMIs. And if not, you can extend the loan period to a repayment period that you are comfortable with.
Proper Loan Management: It could be possible that you may have extra funds while paying your EMIs. If you wish to see how your prepayments impact your EMI before the loan term ends, the home loan EMI calculator can help you know the same.
Comparing Loan Offers: Using the Home Loan EMI calculator, you can compare loan offerings by different lenders. The calculator will let you know the total cost of each loan and the EMI of the same. This, in turn, will help you choose the most suitable option.
You can consider taking a home loan from Tata Capital which offers the most competitive interest rates, starting at just 6.9%. Their flexible loan options let you take a home loan not only to purchase a home but also for purchasing a plot of land for construction, for doing any home extension or improvement, or transferring your loan from another lender at attractive terms. You can also use Tata Capital’s Home Loan Eligibility Calculator to determine your housing loan eligibility in seconds. The company also offers easy and flexible repayment terms, including an option to start your repayment tenure with lower EMIs and pay more as your income grows.
The best part is that you can complete the entire loan application process completely contactless with minimum documentation. So what are you waiting for? Apply for a home loan today!