A Loan Against Property (LAP) EMI calculator is an online tool that calculates the monthly instalments to be paid towards the loan amount. The calculator gives accurate results on the basis of relevant details, such as loan amount, interest rate and loan tenure.
Better financial planning and a practical assessment of repayment capability are important to stay away from any kind of financial turmoil. Thus, an EMI calculator provides a better picture of the situation while availing a LAP. EMI stands for Equated Monthly Instalment. Paisabazaar’s LAP EMI Calculator helps to measure the loan repayment capability by calculating the monthly instalments to be paid. It also gives a break-up of the total payment in the form of Amortization Schedule. This schedule is the tabular presentation of the periodic loan payment, principal amount and the interest rate.
What is Loan Against Property?
Loan Against Property or Mortgage Loan is a type of secured loan sanctioned against both commercial and residential properties owned by the borrower. The lender or the financial institution keeps this property as collateral till the loan is fully repaid. Both salaried and non-salaried individuals are eligible for a mortgage loan. The loan amount received under LAP can be used for various purposes like starting a business, buying a property, footing medical bills, meeting wedding-related expenses, paying education fees, etc. The loan to be repaid is distributed over a period in the form of Equated Monthly Instalment (EMI) so that repayment does not become a burden on the borrower.
What is Loan Against Property EMI?
An EMI is the fixed monthly amount, comprising the principal amount and the interest, that the borrower pays until the loan is fully repaid. Initially, a big portion of the EMI consists of the interest amount. Later, a bigger chunk is devoted to principal payment. Knowing the EMI in advance helps in deciding the loan amount to be taken as per the financial situation. An important factor that helps to decide the repayment amount is the interest rate offered on LAP. The rate varies for different banks and financial institutions.
Also Read: Documents Required for Loan Against Property
Factors Affecting LAP EMI Calculation
EMI Calculators work on the basis of the following EMI Calculation Formula:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
In this formula,
EMI - Equated Monthly Instalment
P - Principal amount (amount borrowed as loan)
R – Applicable rate of interest (interest rate should be on a monthly basis)
N - Loan tenure or the number of EMIs to be paid (tenure should be in months)
The above formula can be used to calculate LAP EMIs manually. However, this process is time consuming and complicated. Thus, it is recommended to use the online calculator.
The 3 important factors that help to decide the EMIs are principal amount, loan tenure or the time period of loan repayment and the rate of interest.
Principal amount: The amount for the loan against property availed from the bank or the financial institution depends on the property that is mortgaged. Thus, bigger the loan amount, higher the EMIs.
Tenure: The loan tenure for mortgage loan depends on the borrower’s current age and the retirement age. Longer the loan tenure, smaller the EMIs.
Rate of interest: The most critical factor that determines the ability and the ease to repay the loan is the interest rate. A higher interest rate can prevent from taking a larger loan amount or can create a situation for a longer tenure. In contrast, a lower interest rate helps to avail a larger loan amount and increases the possibility of easy prepayment. The interest rate also depends on the type of property to be mortgaged, borrower’s profile and his/her credit score. Different banks and housing finance institutions offer different interest rates which keep changing from time to time. The rate can be floating, where it may change during the loan tenure, or fixed, where it remains the same during the entire tenure.
Also Read: All About Fixed Interest Rate and Floating Interest Rate
Let us look at LAP interest rates offered by some of the leading financial institutions in India:
How to Use Paisabazaar LAP EMI Calculator
Paisabazaar LAP EMI Calculator uses details like principal amount, interest rate and loan tenure to calculate the EMI amount. Follow the below mentioned steps to calculate the EMI:
- Enter the principal amount of the loan that you wish to borrow
- Enter the rate of interest that has been offered by the provider
- Enter the tenure over which you would like to repay the borrowed amount
Once all the details are provided, the payable EMI amount will show up. You can check the EMI amount for different tenures to find the one that suits your pocket.
Also Read: All About Loan Against Property
What are Benefits of Using Paisabazaar LAP EMI Calculator?
Loan Against Property EMI calculator on Paisabazaar.com is a free tool that lets you calculate the monthly instalment you need to pay for your loan. It helps you to make a wiser decision while applying for a LAP. Some of the benefits of using Paisabazaar’s LAP EMI Calculator are:
- Instant results: Loan against property calculator helps to stay away from tedious calculations
- Easy-to-use: This tool is easy to use. Just feed in the details about the loan to see the results
- Different combinations: Try different combinations of the principal amount, interest rate and tenure to get an EMI which suits the need and pocket. EMI can be calculated numerous times
- 24*7 Access: This calculator can be used any time of the day on the Paisabazaar website. It also provides the break-up of the total payment in the form of Amortization Schedule
