Calculating Home Loan EMIs

A Beginner’s Guide to Home Loan EMI Payments

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Pursuing home ownership can be both exciting and daunting. One of the most important aspects to consider while buying a home is EMI (Equated Monthly Installment). Understanding EMIs fully can help home buyers plan their finances and make informed decisions while applying for a home loan.

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What is an EMI?

An EMI (Equated Monthly Installment) is the fixed amount paid by a borrower to a lender at a periodic interval over an agreed period of time. When it comes to home loans, the EMI is calculated based on the principal loan amount, the applicable interest rate, and the tenure of the loan. The EMI payment comprises two components: principal repayment and interest payment. Therefore, with each EMI payment, a portion of the principal is repaid along with interest for that month.

Calculating Home Loan EMIs

Example: If you took a Home Loan Amounting: to ₹10,00,000, with an Interest Rate: of 10%, for a Loan Tenure: of 10 Years?

Ans. Then your Loan EMI is ₹13,215 and your Total Interest Payable: is ₹5,85,809, and also your Total Payment (Principal + Interest): is ₹15,85,809.

Calculating Home Loan EMIs
Calculating Home Loan EMIs

Calculating EMI for home loans is simple. You can start with the EMI calculator available online to get an estimate of your monthly payments. To calculate manually, you need to use this formula: EMI =/. P stands for the loan amount, R is the monthly rate of interest calculated on the reduced balance of principal, and N is the number of months taken to repay the loan.

Factors Affecting Home Loan EMIs

The amount of your home loan EMI depends on several factors, including the loan amount taken, the interest rate charged by the lender, and the tenure of the loan. The longer the tenure of your loan repayment, the lower your EMIs will be as you are spreading out the repayment over a longer period. Conversely, shortening your tenure increases EMIs but also reduces the interest paid. Additionally, if you opt for a floating-rate home loan and rates increase during the course of your payback period, so too do the EMIs required to meet these payments.

Interest Rates and Floating or Fixed Loan Options

When taking a home loan, you’ll have the option to choose between a fixed or floating rate of interest. With a fixed rate, your interest and EMIs remain unchanged throughout the tenure of the loan. On the other hand, with a floating rate, your monthly EMIs can change as lending rates fluctuate. Both loan options offer their own set of pros and cons, so it’s important to think carefully before deciding which rate is best for you.

Benefits of EMI Payments

One of the main benefits of EMI payments is that they enable you to purchase a house without relying heavily on your savings. EMIs also help you to spread out the repayment process so that making monthly payments isn’t too overwhelming. Additionally, paying through EMIs can offer tax benefits as some home loan interest payments may be eligible for deductions from total taxable income, reducing your overall tax amount.

How Does Home Credit Pay EMI Work?

Understand how Home Credit Pay EMI works, get the facts on how your payments will be processed, and know the advantages!

Home Credit Pay EMI offers a simple and convenient way to pay off loan debt. By providing an easy-to-use platform, Home Credit ensures your payments are processed quickly and securely. Learn more about this payment option and the advantages it offers here!

Home Credit Pay EMI is a secure payment system that allows you to pay your loan EMIs online. Simply put in your details, select the amount you would like to pay, and click ‘Pay Now’. Once payment is successful, your loan account will be updated with the amount paid and your EMI due date will shift accordingly. With Home Credit Pay EMI, customers also get additional benefits such as no hidden charges, interest rate discounts, and cashback on payments!

What Information Do I Need to Register for Home Credit Pay EMI?

To register for Home Credit Pay EMI, you need to provide some basic information. This includes your name, email, and mobile phone number. You will also need to enter the loan account number of your Home Credit loan and create a password. Once all this is done, you can start making easy online payments on time!

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