Calculating EMI: Ways to Manage Your Home Loan Burden

Are you planning to purchase your dream home or renovate your current property? You must be aware that this is a huge financial and long-term commitment. Opting for a home loan is a smart way to turn your dreams into reality. The problem is paying the monthly EMIs for the loan. Thanks to non-banking financial companies (NBFCs), the loan verification process has never been easier. The minimum and maximum home loan amounts offered are generally Rs.10 lakh and Rs.5 crore, respectively.


Here is a closer look along with a few tips to sail through the repayment process.


Step 1: Start Paying a Higher EMI if You can


The home loan period comes to an end much sooner if you pay a higher EMI. It not only brings down the loan tenure but also reduces the interest payment. All you have to do is cut down on unnecessary expenses and channel the savings towards your monthly home loan EMIs payments. But choosing a higher EMI can also turn out to be a burden with repayments of the home loan.


Step 2: Manage your Finances Carefully


You will also need to manage your finances carefully. Avoid unnecessary expenses and credit card usage. It is wise to save the extra money for your monthly home loan payments. Close investments that do not fetch you enough returns.


Step 3: Try to Make Partial Payments in Advance

Partial payments in advance help reduce the remaining principal amount due to be paid. You can also try to make an occasional extra payment whenever you can. You can do this with a bonus from work, or an endowment or gift. But you should check with your bank for charges for partial payments before choosing this option.


Step 4: Choose a Bank with a Lower Interest Rate


You should try to opt for a bank that charges a lower  interest rate. You can do this easily by transferring the whole principal amount to another lender with a lower interest rate. Try to avoid switching too often from one lender to another using the home loan balance transfer facility. This involves a lot of paperwork along with an underwriting process. Banks often charge a fee for this facility. Look out for good offers that loan providers often roll out during the festival season.


Step 5: Don’t Delay or Default on Monthly Payments


This is an extremely important factor, as even one late or missed payment directly affects your credit score. You must focus entirely on repaying all the EMIs in a timely manner. Avoid unnecessary use of credit cards and other expenses until you have cleared the EMIs for your home loan. You should not take out another loan until you have cleared the older ones.


Step 6: Use an EMI Calculator


A home loan EMI calculator is an online tool that helps you calculate the instalment amount that you need to pay on a monthly basis. It is a simple process and can be done in a few minutes. The EMI calculator gives you a clear picture of what you are expected to pay in future so that you can manage your present. In brief, it helps you find that exact piece of information that you need.




There is certainly joy and happiness of owning your own home. A home loan is a long-term commitment and a huge decision. As mentioned earlier, financial institutions offer housing loans at attractive rates. Plus, you can even check out the offers available to you. Owning your dream home can indeed become a reality. You will feel relief and peace once you have paid off your home loan after all the sacrifices you have made. All you need to do is plan the entire thing well and manage your finances carefully.

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