Every home loan has EMIs associated with it, and every potential buyer needs a loan. This fact doesn’t change with the location, size or type of the home. Visiting a bank or Non-Banking Financial Company (NBFC) can help you get a loan. To apply, you must fill up a form and submit it, after which the lender will decide whether it will be approved. That said, using the LIC Home Loan Calculator beforehand speeds things up and ensures you cut the right deal.
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In this article, we will deeply understand what a home loan calculator is and how it works. Further, we will cover the amortisation schedule, EMI determinants and why you should use an EMI calculator. Ultimately, we see how loans for different amounts behave over various tenures and compare a few offers from different lenders.
What is the LIC Home Loan Calculator?
Whether you build a home or buy one, a home loan is something you cannot avoid. That said, home loans bring EMIs or Equated Monthly Instalments as well. These are equal amounts the borrower needs to pay every month to pay off the loan over a specific period of time.
The EMI comprises two parts – Principal Amount and Interest Amount. We will understand what these terms mean in the following section.
How does the LIC Home Loan EMI Calculator Work?
Like any other Non-Banking Financial Company or bank, the Life Insurance Company also allows its customers to avail of a home loan. While the principal amount and tenure depend on the customer, the LIC HFL company sets the rate of interest based on the norms laid out by the Reserve Bank of India.
Read: Standard Chartered Bank Home Loan Interest Rate – Updated in April 2024
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The prices in the real estate sector are extremely volatile and are constantly growing. As a result, home loans are now being taken out for larger amounts and longer tenures. The illustration below will help us understand how it all ties in together.
(Every visitor sees this when they log onto the LIC calculator webpage.)
- The image clearly shows three sliders that you can alter. They are the Loan Amount Required, Repayment Term (Months) and Interest Rate.
- Enter the loan amount and interest rate values first.
- Move around the tenure and see how the EMI changes on the right.
The Loan Amount Required is decided by the borrower, whereas the lender decides the Interest Rate. However, the borrower can opt for a customised Tenure which can help them lower the EMI.
You can see the Monthly EMI, Total Interest and Total Payment on the right side. To know how these values change with Tenure, read on.
How the LIC HFL EMI Calculator Helps while Buying a Home?
As we have now understood how the calculator functions, let’s see how all the values are interconnected. When speaking of the EMI, no one wants too high of an EMI, so opting for the longest possible tenure seems the most likely option. But more forces are involved, and the following cases will help reveal them.
(A loan worth ten lakhs being drawn out for ten years at ten percent interest per annum.)
In the above image, the Loan Amount Required is ten lakhs, and the Interest Rate is 10%. So, if an individual takes this loan for ten years, their EMI will be 13,215, whereas the Total Interest will be 5,85,809. As a result, the Total Payment will come up to 15,85,809.
Suppose you want to lower the EMI. The obvious approach would be to increase the Tenure. Let’s see how that affects all the other amounts.
Read: Complete Guide to Loan Against Property for 2024
(A loan worth ten lakhs being drawn out for twenty years at ten percent interest per annum.)
Let’s assume that the Tenure is now twenty years (240 months) instead of ten years (120 months). In that case, the EMI would drastically come down to 9,650. However, the Total Interest would jump up to 13,16,052, bringing up the Total Payment to 23,16,052.
Our cases have revealed that:
- The EMI and Tenure are inversely proportional.
- The Total Interest and Tenure are directly proportional.
In other words, The Total Payment rises with the Tenure, although the EMI reduces. Therefore, the critical choice applicants need to make is between a Lower EMI or Lower Total Interest. However, the choice is not as obvious as it seems, as we all have different priorities and lifestyles.
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How Does the Loan Amortisation Schedule Help?
An Amortisation Schedule can be drawn up for any level-payment loan or, in other words, any loan that is repaid via EMIs. Although it sounds complex, it is quite a straightforward phenomenon and very helpful as well.
(The monthly Amortisation Schedule for a home loan worth ten lakhs being drawn out for twenty years at ten percent interest per annum.)
The Amortisation Schedule linked to a home loan tells us about the following:
- Months: Corresponds with the number of months the loan is being drawn out for.
- Outstanding Loan: This shows the opening balance at the beginning of every month.
- Principal: This shows the amount paid off from the principal sum.
- Interest: This shows the amount paid off from the total interest.
- EMI: This shows the monthly EMI.
Additionally, some amortisation schedules also share a closing balance amount at the end. This is the amount still owed at the end of every month. This also becomes the opening balance or Outstanding Loan for the following month.
Read: 25 Lakh Home Loan EMI With Calculator And Interest Rates 2024
Why Should You Consider Using the LIC HFL EMI Calculator?
You may think that using this calculator is the same as talking to an executive from the bank. That is true, but there are other merits of using this webpage.
- Chargeless: Visiting the webpage is free and does not cost any user whether they apply for a home loan or not.
- Effortless: Using this calculator does not need any special skills or tedious work. Anyone with basic computer skills can get it done. Additionally, you can do it multiple times by altering the variables.
- Errorless: Calculators were designed to forego human error. This variant does the same, just with bigger numbers and tougher calculations.
What Are the Factors Affecting The EMI?
Equated Monthly Instalments or EMIs are not just affected by tenure. There are a few more determinants that matter. Let’s go over them.
- Tenure: We have already understood how tenure alters the EMI. It shares an inversely proportional relationship.
- Interest Rate: The rate of interest multiplied by the principal amount gives us the total interest amount. If added to the principal amount, this results in the total amount payable. The higher the interest amount, the higher the amount payable. As a result, higher the EMI.
- Advances: Most lenders allow applicants to pay off parts of the principal amount during the loan tenure. This helps bring down the borrowed sum, reducing the EMI.
- Down payment: Everyone knows that a down payment needs to be made while buying a home. This is mostly set at 20%, but buyers can pay more upfront, reducing the borrowed sum. This, in turn, will knock down the EMI further.
- Lenders: Banks and other lending institutions offer home loans, and there is always competition. That said, applicants should compare and go for the best option. However, there is also an option which lets applicants switch lenders mid-loan. This may be advantageous if done correctly.
LIC HFL Home Loan Calculation for Different Amounts
India is one of the largest countries in the world, with the second-highest population. This gives rise to diversity. Indians buy homes in different states and cities. Furthermore, these homes vary in size and style. As a result, the prices are different, and loans need to be drawn out for different amounts and tenures. Let’s see what the LIC HFL EMI calculator displays with different variables.
Read: SBI Shaurya Home Loans: Invest in Your Future – Apply Today
| Principal Amount | EMI with a 10-year tenure @8.65% | EMI with a 20-year tenure @8.65% | EMI with a 30-year tenure @8.65% |
| ₹10,00,000 | ₹12,479 | ₹8,773 | ₹7,796 |
| ₹20,00,000 | ₹24,958 | ₹17,547 | ₹15,591 |
| ₹30,00,000 | ₹37,437 | ₹26,320 | ₹23,387 |
| ₹40,00,000 | ₹49,916 | ₹35,094 | ₹31,183 |
| ₹50,00,000 | ₹62,395 | ₹43,867 | ₹38,978 |
As is evident by scanning the table above, the EMI goes down quite a bit with an increase in tenure. However, it would help if you always remembered that the interest amount rises with the tenure, which means a higher total amount payable.
Comparison of Different Home Loans
The table below will compare home loan rates from some popular lenders across the country.
| Lender Name | 0-30 lakhs | 30-75 lakhs | More than 75 lakhs |
| LIC HFL | 8.65% – 10.10% | 8.65% – 10.30% | 8.65% – 10.50% |
| HDFC | 8.65% – 10.35% | 8.65% – 10.60% | 8.65% – 10.70% |
| Bajaj Housing | 8.75% onwards | 8.75% onwards | 8.70% onwards |
| Tata Capital | 8.95% onwards | 8.95% onwards | 8.95% onwards |
| Aditya Birla | 8.75% – 14.50% | 8.75% – 14.50% | 8.75% – 14.50% |
Try and stay updated with the news from the banking sector. Keeping track of lenders can also let you in on some special offers they run from time to time.
You cannot avoid home loans if you want to buy a home. Hence, EMIs are also unavoidable, at least the ones pertaining to home loans. So it is vital to understand what the EMI comprises and the factors that affect it. The top tip while applying for home loans is to try to strike the perfect balance between the EMI and Total Interest. In other words, try to set a tenure that neither makes the EMI inconvenient nor the total amount payable too high.
Once you have set your budget, use the LIC Home Loan Calculator and doctor the EMI as needed. Then, log onto NoBroker and use our search filter to pick out your favourites quicker. You can also log onto NoBroker Times and read articles on similar real estate topics like Stamp Duty or celebrity homes.
EMI Calculator
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Rate of Interest (P.A)
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Loan Tenure
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Principal Amount
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FAQ’s
Q1: What is EMI?
A1: EMIs, or Equated Monthly Instalments, are the amounts borrowers need to pay back to the lender every month until the tenure of the loan expires. It comprises interest and principal amounts.
Q2: Is it good to make partial pre-payments in home loans?
A2: Pre Payments can be very useful if you come into some money while the tenure for a home loan is still running. It can take a chunk off your principal amount and help lower the EMI for the future. First, however, it is useful to read up on the terms and conditions the lender offers. This is because some lenders levy a penal charge while making pre-payments or foreclosing loans.
Q3: Can a home loan only be drawn out to buy a home?
A3: Contrary to popular belief, you can use a home loan for much more than just buying a home. You can use a home loan to:
(1)Repair a home.
(2)Expand a home.
(3)Build a home.
(4)Renovate a home.
(5)Buy a home.
Q4: When do I owe the EMI for a month?
A4: Typically, the date of disbursal of the amount determines the EMI due date every month. However, you can alter this by speaking to your lender. Try moving it to a date after your salary is credited to avoid missing payments.
Q5: Who can apply for home loans?
A5: There is an eligibility criterion associated with home loans, and the applicant must:
(1)Be between the ages of 18-70.
(2)Earn at least 25,000/month.
(3)Have a credit score of above 750 points.
(4)Possess at least two years of work experience.
(5)Be an Indian citizen or NRI.
