A typical loan is paid back using EMIs or Equated Monthly Instalments. A home loan also works the same way. That said, home loans today need to be taken out for large amounts, considering the high prices associated with soaring real estate prices. That’s where the BOI home loan EMI calculator comes into play.
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In this article, we will learn what an EMI calculator is and go through a guide that will help us understand how it functions. Further, we will see the factors EMIs depend on and how using the calculator can help us. Ultimately, we will conclude by comparing a few home loan offers from popular lenders.
What is the BOI Home Loan EMI Calculator?
When we decide to buy or build our home, we not only need to make a down payment and pay the associated taxes, but we also need to apply for a home loan. The application process is pretty straightforward, and you can do it by visiting any bank.
The complication lies in the EMI calculation procedure. The BOI home loan calculator can forego your visit to the bank and help you on your couch instead. It is a tool that helps users doctor the tenure to arrive at a suitable EMI amount. Let’s see how it works.
How does the EMI Calculator work?
The EMI calculator typically has three fields that need to be filled in by the user. They are:
- Loan Amount: This is the principal asking amount for which the loan needs to be drawn.
- Tenure: This shows the time period across which you will repay the loan.
- Interest Rate: This shows the rate of interest the bank charges for the service.
(A 10,00,000 loan being drawn out for 120 months at 9% rate of interest per annum.)
The above image shows the BOI EMI calculator for home loan, and we can see the three fields that you can change. Once all three figures are entered, the result is displayed in the grey box at the bottom. In this case, the EMI (approx) turns out to be 12,668.
How the BOI Home Loan Emi Calculator Helps You while Buying a Home?
This calculator may look like any other program and quite ordinary at face value, but it has its uses. Let’s see how it can assist us while purchasing a home.
(A 10,00,000 loan being drawn out for 120 months at 9% rate of interest per annum.)
In the above scenario, a loan worth ten lakhs is being drawn out for ten years at an interest rate of 9% per annum. So the resultant EMI is 12668. This is the amount the borrower needs to pay every month for the next ten years to repay the loan. So that means the Total Payable Amount is 12668×120= 15,20,160.
This implies that the Total Interest Payable is 5,20,160.
(A 10,00,000 loan being drawn out for 240 months at 9% rate of interest per annum.)
In this scenario, everything remains the same, apart from the Tenure, which is now 240 months. Therefore, the resultant EMI is 8,997, which implies a Total Payable Amount of 21,59,280.
This means that the new Total Interest Payable is 11,59,280.
After carefully examining both the scenarios above, we have understood that:
- The EMI and Tenure are inversely proportional.
- The Total Interest Payable and Tenure are directly proportional.
Hence, the Total Payable Amount is directly proportional to the Tenure.
Although lower EMIs may look attractive, using the BOI calculator for home loan, we have learnt that lower EMIs mean higher interest. So make your choice wisely.
EMI Calculator
Loan Amount
₹
Rate of Interest (P.A)
%
Loan Tenure
Yr
Principal Amount
Total Amount
What is an Amortisation Schedule and How does it help?
The Amortisation Schedule is a document provided to understand the home loan better. It presents a breakdown of every payment, showcased in a yearly or monthly form. It also lets applicants see how the money they pay gets divided into interest and principal payments.
(This is an amortisation schedule for a loan worth ten lakhs for ten years at 9% per annum.)
The above table showcases the monthly amortisation schedule for a home loan. It shows:
- Months: This corresponds to the number of months equal to the total tenure.
- Principal: This shows the principal amount repaid each month.
- Interest: This shows the interest amount paid each month.
- EMI: This shows the Principal+Interest paid each month, which results in EMI.
- Balance: This shows the remaining total amount to be repaid.
Some amortisation schedules also show an opening balance at the beginning of each month. This value is the same as the closing balance from the previous month.
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Why should you use the BOI Home Loan EMI Calculator?
At face value, this tool may look like an ordinary, everyday calculator, but it does a lot more. Let’s see why we should consider using this.
- Free: It is a tool anyone can use, free of cost. All they need is a working internet connection and basic computer skills. Just log onto the webpage and give it a go.
- Easy: All this tool requires us to enter the values correctly. As long as we know the principal amount and interest rate, we can play around with the tenure until we reach a comfortable EMI.
- Correct: The calculator is a device we invented to eradicate human error, and the BOI home loan calculator is no different. Going through these calculations with a pen and paper is complex and takes much time.
What are the Factors affecting EMI?
So far, we have deciphered that the tenure of a loan greatly affects the EMI. However, there are a few more factors that can alter it as well. Let’s see what they are.
- Tenure: As we have covered how tenure affects EMI, we know it is important.
- Interest Rate: The interest rate is governed by the Reserve Bank of India and set by the lending institution. Applicants cannot alter that at all. That said, the interest rate added to the principal amount reveals the total payable amount, which determines the EMI.
- Advance Payments: Pre-payment or advance payment is a service most lenders provide. Using this, borrowers can pay off chunks of the principal amount, which reduces the EMI substantially. That said, some outfits also levy a charge to use this feature.
- Down Payment: While buying a home, we need to pay at least 20% of the price as a down payment. This also brings down the principal loan amount by quite a bit. However, potential buyers can also pay more than 20% as a down payment to reduce the EMI further.
- Lenders: This implies the lending institution or bank. Although the RBI fixes the lending rate, there is little wiggle room. Lenders can alter their rates to attract more customers. So it is wise to compare before finalising a lender.
Using the BOI Home Loan Calculator with Different Amounts and Tenures
While buying a home, different buyers have different benchmarks. This also alters the price of homes people buy. This results in home loans being borrowed for different amounts as well. Let’s see a few examples.
| Principal Amount | EMI with a 10-year tenure @9% | EMI with a 20-year tenure @9% | EMI with a 30-year tenure @9% |
| ₹10,00,000 | ₹12,668 | ₹8,997 | ₹8,046 |
| ₹20,00,000 | ₹25,335 | ₹17,995 | ₹16,092 |
| ₹30,00,000 | ₹38,003 | ₹26,992 | ₹24,139 |
| ₹40,00,000 | ₹50,670 | ₹35,989 | ₹32,185 |
| ₹50,00,000 | ₹63,338 | ₹44,986 | ₹40,231 |
Comparing Different Home Loans
Although we have understood how to use the BOI home loan calculator to set a suitable EMI, we also need to compare the offers from different lenders and pick the best from the lot. The following table showcases offers from some popular lenders in India.
| Banks | Rate of Interest | Processing Fees |
| Bank of India (BOI) | 8.65% per annum | None |
| State Bank of India (SBI) | 8.75% per annum | 0.35%+GST |
| LIC HFL | 8.90% per annum | 10,000-15,000 |
| IDFC First Bank | 8.75% per annum | 5,000 |
| Federal Bank | 9.90% per annum | 3,000-7,500 |
While selecting a home loan lender, it is useful to keep an eye out for offers and deals.
Read: Cibil Score for Home Loan: How to Check and Minimum Requirements
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We cannot avoid home loans and must use them while buying homes. Although they charge interest, these banking services help us invest in the volatile real estate market. In addition, the EMIs allow us to pay over time.
Using the BOI Home loan EMI calculator, you can see how different tenures affect the EMI and Interest Amount. This, in turn, will help you choose between- a lower EMI and a higher interest amount or a higher EMI and a lower interest amount. Ultimately, the choice is yours but trying to maintain balance is always advisable. So, to get to your dream home quickly, log onto NoBroker and use our filter to refine your search.
EMI Calculator
Loan Amount
₹
Rate of Interest (P.A)
%
Loan Tenure
Yr
Principal Amount
Total Amount
FAQ’s
Q1: Is the rate of interest always fixed?
A1: Typically, people go for a fixed rate of interest. However, an option known as a floating interest rate also exists. This rate changes according to the market and economy. In other words, this option can either save loads of money or lose it. So, people opting for this need proper market knowledge.
Q2: Can making advance loan payments be helpful?
A2: On paper, nothing sounds better than slashing the principal amount and saving up on interest. However, pre-payments are often accompanied by fines. Read the terms and conditions provided by the lender to help make an informed decision.
Q3: What else can a home loan be used for?
A3: You can take out a home loan to:
(1)Build a house.
(2)Repair a house
(3)Renovate a house
(4)Extend a house
Q4: What are the eligibility criteria for home loans?
A4: Every applicant must:
(1)Be 18 years or older.
(2)Be an Indian citizen or NRI.
(3)Earn at least 25,000 every month.
(4)Have at least two months of job experience.
(5)Showcase a credit score of at least 750 points.
Q5: What happens when I miss an EMI payment?
A5: When you fail to pay the EMI on or before the due date, it accumulates interest which rises with every passing day. Lenders also levy a fine, and our credit score also goes down.
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