DHFL or Dewan Housing Finance Corporation Limited comes among the top fifty largest financial organisations in India. It was set up in 1984 to provide housing finance to the middle and low-income group of the country.
Based in Mumbai, DHFL has its branches in most cities across the country providing financing to individuals in the rural and semi-urban areas of India. Individuals who desire to purchase a residential property can avail housing finance from this lender at competitive charges starting at 8.75% p.a.
However, borrowers must conclude an extensive analysis of their present financial capability before applying for a housing loan. In such cases, they can utilise a DHFL home loan calculator to assess the advance’s affordability.
What is a Home Loan Calculator?
Typically, home loans come with an extended repayment time frame. As a result, the total payable amount towards the interest component increases, which impacts monthly repayments. So, borrowers need to be mindful when selecting EMIs for home loans.
Nonetheless, the calculations can be challenging to comprehend, and so, a DHFL home loan EMI calculator comes handy. Applicants need to enter parameters like repayment tenure, loan amount, and interest rate, whereby the calculator generates the EMI amount.
How Does a DHFL Home Loan Calculator Work?
A DHFL housing loan EMI calculator works based on the following formulaic expression –
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
- P represents the loan amount
- N represents the repayment tenure in months
- R stands for an applicable interest rate
For convenient understanding, here is an example that illustrates the working of a DHFL home loan calculator –
Prakash wants to buy a house whose market value is Rs. 45 lakh. DHFL approves 80% of the buying price, i.e. Rs. 36 lakh, at a 9% interest rate p.a. for 15 years.
Here, inputs to the calculator comprise –
|P or Loan value||Rs.36,00,000|
|R or Rate of interest||9%|
|N or Tenure||180 months|
Now, based on the formula –
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
= [36,00,000 X 9% X (1+9)^180] /[(1+9)^180-1]
Hence, Prakash has to pay Rs. 36,514.6 as monthly instalment for 15 years. Also, he can assess the entire repayment liability on the DHFL housing loan calculator, computed as Rs. 65,72,448.
What Factors Determine Home Loan EMIs?
Following are a few determining factors of housing loan EMIs –
- The rate of interest is one of the crucial influencers of home loan EMIs. Affordable interest rates help to keep the monthly instalment amount low and vice versa. Therefore, individuals should opt for an attractive rate of interest for loan repayment.
- Similarly, if individuals opt for a loan amount of high value, it results in increased EMIs. So, before selecting the amount, individuals should assess their repayment capacity and decide accordingly.
- On the other hand, if borrowers choose a prolonged tenure, they can keep the EMIs affordable, but the total interest charge can enhance.
What are the Benefits of a Home Loan Calculator?
Individuals can receive a handful of advantages when using a DHFL home loan calculator–
- Its user-friendly interface helps individuals to calculate the EMIs even with minimum technical know-how.
- It can also provide a near-accurate estimation of upcoming expenses for loan repayment. So, borrowers can be financially prepared beforehand.
- Also, home loan calculators assist borrowers in comparing loan options to find out a suitable EMI as per their repayment capacity.
Individuals must understand that a home loan is a significant financial responsibility, and therefore, evaluation of their financial capacity is essential to keep repayments affordable. DHFL home loan calculator thus helps borrowers to conclude this research before applying for a loan.