What is the EMI I have to pay on a 20-year Rs. 20 lac housing loan at 9.5%? By how much does the EMI change if I opt for a 14-year housing loan at 9%? What is the toal interest amount I end up paying over the term of the loan? How is the EMI I pay split between the prinicpal and interest repayments?
If these are questions that have played tricks on your mind, the Indian Home Loan EMI Calculator is for you. It’s an Excel workbook I designed to test my understanding of finance (and Excel). The model works well and validates the figures given in popular finance magazines such as Outlook Money and Money Today.
Using this EMI calculator is quite simple. You will find 6-worksheets inside the workbook: one each for a loan term of 10, 12, 14, 16, 18, and 20 years. First select the appropriate worksheet. For example, for a 16-year loan tenure you should select the worksheet titled “16 Years.” On the top-left corner is a section titled Loan Parameters. You will have to key-in two figures:
- Principal (or Loan Amount) – The amount of loan you wish to apply for
- Rate of Interest – The interest figure quoted by the bank
Once you have entered these two values, you will instantly see the loan repayment schedule (with principal and interest components) alongwith summary figures such as Total Interest paid and Total Amount Paid Back.
At a beginner level, leave the other two parameters viz. Repayment Time and Compounding Factor at the default setting. By default, the workbook has repayment schedules worked out for a loan amount of Rs. 20 lac at 9% interest.
Let me know if you have any difficulties in using this workbook. Suggestions for improvements are most welcome.