Home Loan Calculator: When a person thinks of buying their own house, the first question that comes to mind is whether the bank will give them a loan based on their salary or not. Banks or financial institutions evaluate your income, job stability, and credit score before passing the loan. Generally, if your monthly salary is above Rs 30,000, you can get a loan of Rs 15 to 20 lakh. On the other hand, if the salary is Rs 50,000 or more, you can take a loan of Rs 30 to 40 lakh.
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Terms for those doing business
If you are not employed and run your own business, then banks ask you for proof of annual income. Also, your credit score plays an important role. If your score is 750 or above, then the chances of getting a home loan approved are quite high.
Understand the math of EMI
It is very important to understand the calculation of EMI while planning a home loan. Suppose you have taken a loan of Rs 30 lakh, the interest rate is 8 percent per annum, and the tenure is 20 years, then your monthly EMI will be around Rs 25,093. However, the total interest amount may vary depending on the interest rate and tenure.
How much loan do banks give?
Generally, banks give loans of up to 75 to 90 percent of the total value of the property. Banks can give up to 90 percent loan on a property up to Rs 30 lakh. But if the price is higher, this percentage decreases to 80 to 75. The remaining amount has to be paid by the buyer as a down payment from his savings.
Smart formula for buying a house
The 3/20/30/40 formula is considered very useful for maintaining financial balance while buying a house. This means that the price of your house should not be more than three times your annual income. Do not keep the loan tenure more than 20 years. Make at least a 30 percent down payment, and your EMI should not exceed 40 percent of your monthly salary. For example, if your salary is Rs 50,000, the EMI should not exceed Rs 20,000 so that there is a balance on other expenses as well.
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Total interest burden on the home loan
If you take a loan of Rs 40 lakh and the interest rate is 7.5 percent, then your monthly EMI will be around Rs 32,000 over a period of 20 years. In this period, you will have to pay a total of about Rs 77 lakh, out of which about Rs 37 lakh will be only interest. It is clear from this that the longer the period and the higher the interest rate, the more interest will have to be paid. Therefore, it is always beneficial to understand the complete calculation with the EMI calculator before taking a loan.