In this formula, P refers to the principal, r is the home loan interest rate, and n refers to the loan tenure in months or the number of instalments the borrower has to pay.įor example, if you avail loan of ₹50,00,000 at a fixed interest rate home loan of 12% for a 10-year tenure, then your EMI will be calculated as under:įor interest rate, 12% p.a. You can calculate your EMI liability and interest rate manually by using the following formula: Manual Calculation of Home Loan Interest Rate:.Therefore, before you apply for a home loan, estimating the overall interest liability towards the loan is vital. The interest rate is charged by the lender as a percentage of the principal loan amount, as a charge for borrowing funds. The amount of interest to be paid on the loan is calculated based on the home loan interest rate. Home loans are long-term loans availed for purchasing or constructing a home.
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