Buying a house is a life-changing event, and affordability is the first criterion one must consider while planning to do so. With property prices soaring and various modes of financing, an online tool to pre-estimate your borrowing power can help you become an empowered borrower. Here are the tools to assess your Housing Loan affordability that you can easily find online.
Understanding the Need for Housing Loan Affordability
A Housing Loan is a long-term liability and should not be looked at as a mere repayment of EMI every month. The interest rate, tenure, amount, and other costs also play a major role in the mix. So, what is better than assessing your eligibility with an online tool that can give you the answer in no time? Apart from making the decision process easier, it will also save time and hassle and help prevent rejection.
The Importance of a Housing Loan Calculator
A Housing Loan calculator is a financial tool that provides an estimate of the EMI for the principal amount of the Loan taken on the basis of the interest rate and tenure. The numbers are taken as input, and the result is provided in less than a minute. You can change the variables multiple times and plug in various Loan and EMI figures to get the best possible scenario.
The results are displayed in pie charts and amortisation tables for a better understanding of Loan affordability. This, however, is just one tool that can be used to calculate affordability. A more detailed analysis can be done with the help of another equally useful tool.
The Importance of a Home Loan Eligibility Calculator
EMIs are important, but what if you’re interested in understanding what the bank might lend you? Lenders made the Home Loan eligibility calculator for that very purpose. Through this useful calculator, you can get a likely maximum amount for a Home Loan based on your financial profile.
This could include monthly income, standing payments at the time, a person’s age, type of employment, etc. Here’s how it works:
- Input your monthly income.
- Input your existing EMIs or other liabilities.
- Input the Tenure of the Loan and the interest rate (which can both be estimated).
The Home Loan eligibility calculator will give you an estimate of the money you’re eligible for.
Benefits of Using These Tools in Practice
Here are the various benefits of using a Housing Loan eligibility calculator:
- Improved Organisation: Before you start looking for a home, you can understand your budgetary constraints properly.
- Make Well-Informed Decisions: Make the right decisions when comparing lenders, terms, and repayment plans.
- Prevent Loan Rejection: Your chances are increased if your application reflects your real eligibility.
- Reasonable Expectations: Recognise the price range you ought to consider.
Ways to Increase the Affordability of Your Home Loan
Here are some strategies to enhance your profile:
- Cut Down on Current Debts: Pay off lesser Credit Card or Loan bills.
- Add a Co-applicant: A working spouse or family member with a constant income can enhance the overall eligible amount.
- Keep your Credit Score Clean: Ensure that you clear dues on time and avoid defaults.
- Choose a Long Tenure: Choosing a longer tenure might increase affordability by lowering your EMI.
Final Thoughts
Taking a Housing Loan is a big decision, and planning for it is important. Instead of guessing how much you might be able to borrow, use the online tools available to help you with your approach. The Housing Loan calculator and Home Loan eligibility calculator are there to help you prepare well for your Loan.
If you use the tools wisely and make little adjustments to your financial profile, you will be edging closer towards owning your home with ease.
