A common thing among all home buyers is the need for a home loan. That said, things like location, home size and layout may differ. Potential buyers need to use the services provided by a bank or Non-Banking Financial Institution (NBFC) to get a loan. Applying for a loan is as easy as filling in a form and meeting with an executive. However, getting approval depends on various factors. The Bank of Baroda- BOB Home Loan Calculator is a tool potential buyers can use to always stay in the driver’s seat.
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In this article, we will learn what a home loan emi calculator is and how it functions. Then we will move on to something called the amortisation schedule and understand the factors that affect the EMI (Equated Monthly Instalment). In the end, we will compare various home loans offered by different lenders.
Decoding the BOB EMI Calculator
Whether you choose to build a home from scratch or buy an apartment within a housing complex, a home loan is always necessary. Whatever your choice, a visit to the bank is the next logical step.
Staying on the topic of home loans, it is important first to understand the EMI or Equated Monthly Instalment. It is the amount the borrower owes the lender every month. It is made up of two parts- principal amount and interest payable.
Typically, an EMI payment is due every month. Considering real estate prices, the tenure runs quite long. In other words, a loan taken out for ten years will have 120 EMIs.
This is where the calculator comes in.
How to use the BOB Home Loan Calculator?
Like any other banking or non-banking financial institution, Bank of Baroda also allows its account holders to take out home loans. These can be taken out for various amounts and tenure. However, the rate of interest depends on the current norms set by the Reserve Bank of India and some other factors.
Since home loans applicants need a lot of money, the tenure needs to be suitable to be able to afford the EMI. While most banks urge customers to talk to them and figure out a solution, the calculator actually offers numerous solutions within minutes. Let’s see how this works-
- This image displays how the calculator looks once you visit the BOB home loan EMI calculator site.
- As you can see, there are three sliders to adjust the Loan Amount, Tenure and Interest Rate.
- To begin, enter these values.
- According to your entries, the Monthly Home Loan EMI value will change.
- Additionally, on the right, you can see how much interest you will be paying in total.
The Principal Amount and the Interest Amount together form the Total Amount Payable. This implies the total sum owed to the bank.
You can alter the loan amount and EMI sliders as per your wish, but the interest rate will have to be fixed at the bank’s current offering. The best part about this process is that it takes almost no time, and one can conjure up multiple ways of addressing the loan within minutes.
How EMI Calculation Helps while Buying a Home?
As we have learnt, the calculator can help you understand how altering the principal amount and tenure can affect the EMI. It is also important to understand the in-depth effects these changes cause. For example, one might be urged to go for the maximum tenure and lower the EMI as far as possible. But that has consequences. Let’s understand them.
Let’s assume the Loan Amount is ten lakhs, and the Tenure is ten years (120 months). For research purposes, let’s also fix the Interest Rate at 8.60% per annum.
In this case, the EMI turns out to be 12,452, and the Interest Payable comes up to 4,94,252, making the Total Amount Payable=14,94,254.
If you think this EMI is too high, try changing the tenure. Let’s see what that does.
In this case, while the Principal Amount and Interest Rate remain the same, the Tenure has been doubled to 20 years (240 months).
As a result, the EMI does drop to 8,742, which may please applicants looking for a lower amount. However, a closer glance to the right reveals that the Interest Amount has risen to 10,97,991, making the new Total Amount Payable = 20,97,991.
These two cases reveal the following:
- The EMI and Tenure are inversely proportional.
- The Interest Amount and Tenure are directly proportional.
So, the Total Amount Payable also grows with the Tenure. Therefore, applicants must make a choice- Lower EMIs and Higher Interest Amount or Higher EMIs and Lower Interest Amount. The choice may seem obvious, but we are all in different situations at different points in time.
Loan Amortisation Schedule: What is it?
A loan amortisation schedule may sound complicated, but it is quite simple to understand. It is a document applicants can get once a home loan has been approved or disbursed. It helps the applicants understand the breakdown of the payments they will be making over the months/years. Here’s an illustration.
The above table shows:
- Year: Corresponds with the number of years the loan has been taken out for.
- Opening Balance: This shows the amount remaining at the beginning of a year.
- EMI: This shows the total amount of EMIs paid throughout the year.
- Interest Paid: This shows the total amount of interest paid throughout the year.
- Principal Paid: This shows the amount of principal paid throughout the year.
- Closing Balance: This shows the amount owed at the end of a year and becomes the opening balance for the following year.
Why Should You Use the BOB Home Loan Calculator?
Many of you may question the necessity of using this calculator. Well, let’s go through a few merits.
- Effortless: Using the calculator is as simple as logging onto the website and just changing the values according to your need. Once you are done adjusting them, the results are instantly presented. Using this negates going over complex calculations yourself.
- Chargeless: Any and everybody can log onto this site and use the calculator for free. The best part is that you can do this without visiting the bank or any other financial institution.
- Errorless: Calculators were made to eradicate human error and save time. This one is no different and does the same, only with more complex calculations.
What are the Determinants of an EMI?
EMIs for home loans typically run for a long time, and understanding the numerous cogs on the wheel can help you befriend them rather than detest them.
- Rate of Interest: The interest rate is one of the most crucial factors affecting EMIs. Moreso because the applicants cannot alter it. Multiplying the rate by the principal amount reveals the total interest payable, which in turn reveals the total amount payable.
- Tenure: As we have learnt, the tenure does change things quite a bit, but over-extending the tenure invites high-interest amounts.
- Lender: The lender implies the bank or non-banking financial company from which the loan has been borrowed. There are many to choose from, and applicants can even switch lenders during a loan tenure.
- Down-Payments: It is common knowledge to pay a percentage of the price of the home in advance. It is generally 20% of the total cost. That said, buyers can raise this amount to lower the loan amount, which will, in turn, lower the EMI as well.
- Advance Payments: Every borrower has the right to pay off either part of the loan or the entire amount before the tenure runs out. In the case of a partial advance, the principal amount is lowered, which lowers the EMI for the future. However, some lenders do charge a penalty for this.
BOB Home Loan EMI Calculation for Different Amounts
We live in a large and diverse country where prices depend on many factors. For example, a 2BHK home in Delhi might cost considerably more than one in Jamshedpur. That said, loan amounts also differ. So, let’s take a quick look at the EMIs for different amounts over different tenures.
| Principal Amount | EMI with a 10-year tenure @8.60% | EMI with a 20-year tenure @8.60% | EMI with a 30-year tenure @8.60% |
| ₹10,00,000 | ₹12,452 | ₹8,742 | ₹7,760 |
| ₹20,00,000 | ₹24,904 | ₹17,483 | ₹15,520 |
| ₹30,00,000 | ₹37,356 | ₹26,225 | ₹23,280 |
| ₹40,00,000 | ₹49,808 | ₹34,967 | ₹31,040 |
| ₹50,00,000 | ₹62,261 | ₹43,708 | ₹38,801 |
As the table illustrates, the EMI always goes down with a rise in tenure. However, it is also advantageous to keep track of the interest amount since it is changed on a percentage/year basis.
Comparing Different Home Loan Offers
The following table lists some popular lenders and their offerings pertaining to a home loan.
Read: Indian Bank Home Loan Interest Rates- Updated in May 2024
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| Lenders | Interest Rate (Per Annum) | Processing Fees |
| Bank of Baroda | 8.6% | Bank’s discretion |
| Indian Overseas Bank | 9.6% | 0.5% up to 20,000 |
| Federal Bank | 9.9% | 3,000-7,500 |
| LIC Housing Finance | 8.9% | 10,000-15,000 |
| PNB Housing Finance | 8.75% | 0.5%+GST |
Keep in mind that interest rates do change over time, and keeping an eye on the financial news can help with that. That said, sometimes banks also give out attractive offers on home loans.
A home loan is an inevitable thing when it comes to buying a home. No matter what kind of a home it is, where it is located or who’s buying it, a home loan always comes into play. As a result, EMIs are something we cannot escape while buying a home, so understanding what affects it and how we can use it in our favour should always be welcomed.
Now that you have understood how the BOB Home Loan Calculator works, you can start with selecting a home. First, log on to NoBroker and browse through thousands of homes across India. To make things easier, use the filter to only see the types of homes you desire.
FAQ’s
Q1: What is the maximum amount I can get with a home loan?
A1: Generally, this figure varies from bank to bank but is similar. Applicants in semi-urban and rural locations can apply for loans up to 1 crore. Meanwhile, the residents of a metro city are eligible for a loan of up to 5 crores. Mumbai is the only one that allows its applicants to go up to 10 crores.
Q2: Are there any Prepayment charges associated with home loans?
A2: This depends on the lender and their terms and conditions. That said, most private banks allow customers to make advance payments without any penal charges.
Q3: Why do processing charges vary?
A3: Processing charges are completely up to the bank, and that is how they charge for the paperwork associated with home loans. That said, these charges are taxable under the GST.
Q4: Share some tips while applying for home loans.
A4: (1)Always compare banks/lenders.
(2)Always read the terms and conditions.
(3)Try and avoid Zero down payment schemes.
(4)Get acquainted with all the charges.
(5)Go through the lender’s history.
Q5: Can I only get a yearly amortisation schedule?
A5: Of course not. You can opt for both a yearly and monthly schedule.
