Dream home acquisition may boggle your mind and involve a lot of complicated calculations. How? Well in regard with EMI, interest rates, repayments and so on. But your friend Regrob always looks out for you and so we are here to help you make these calculations seem like a cakewalk.
Let us first have a look at home loan rates prevailing in the country as of January 2017.
| Bank Name | Interest Rate | Processing Fee | Loan Amount | Tenure Range |
| PNBHFL | 8.80%-9.10% | Up to 0.5% | 5 lakh min. | 1-30 years |
| SBI | 8.65%-8.70% | 0 | 15L- 10Crs. | 1-30 years |
| ICICI BANK | 8.70%-8.85% | Up to 0.5% | 5L- 10Crs. | 3-30 years |
| HDFC LTD | 8.65%-8.75% | Up to 0.5% | 5L- 10Crs. | 1-30 years |
| INDIABULLS | 8.70%-10.05% | Up to 0.5% | 2L -3Crs. | 1-30 years |
| AXIS BANK | 8.65%-11.75% | Up to 0.5% | 5L- 10Crs. | 1-30 years |
| DHFL | 8.60%-9.75% | 5000-20000 | 1L – 5Crs. | 1-30 years |
| LIC HFL | 9.40% | 1000-15000 | 1 lakh min. | 5-30 years |
| BANK OF BARODA | 8.35%-9.35% | 7500-20000 | 1L – 2Crs. | Up to 30 years |
| CANARA BANK | 9.15%-9.70% | 1500-10000 | – | Up to 30 years |
| IDBI BANK | 8.80%-8.85% | 0 | 5L- 10Crs. | Up to 30 years |
| YES BANK | 10.25%-10.75% | Up to 11500 | 5L – 500L | 1-25 years |
And now let us go into detail as to how much EMI and interest will you be paying on a 20 lakh home loan . So without further bother, let us get into it.
But first you may ask, what is EMI?
Equated Monthly Installment – EMI for short is the amount payable every month to the bank or any other financial institution until the loan amount is fully paid off. It consists of the interest on loan as well as part of the principal amount to be repaid. The sum of principal amount and interest is divided by the tenure i.e., number of months in which the loan has to be repaid. This amount has to be paid monthly. The interest component of the EMI would be larger during the initial months and gradually reduce with each payment.Click here to read about How to deal with an increase in interest rates ?
The exact percentage allocated towards payment of the principal depends on the interest rate. Even though your monthly EMI payment won’t change.The proportion of principal and interest components will change with time. With each successive payment you’ll pay more towards the principal and less in interest.
Here’s the formula to calculate EMI:
where
E is EMI
P is Principal Loan Amount
r is rate of interest calculated on monthly basis. (i.e., r = Rate of Annual interest/12/100. If rate of interest is 10.5% per annum, then r = 10.5/12/100=0.00875)
n is loan term / tenure / duration in number of months.
Now, go in detail of 20 lakh home loan.
So in this case, our loan amount is Rs. 20,00,000.
Assumed rate of interest is 10.5% and tenure of loan is 10 years.
In a nutshell, the Loan EMI comes out to be Rs. 26,987. The total interest payments over the years will be a total of Rs. 12,38,440. The total payment, Interest as well as EMI will be Rs 32,38,440.
So we hope this gives you an idea of what to expect in this scenario. If you need more assistance you have your trusted on Regrob.
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