Indian Bank, established in 1907, is one of the leading public sector financial institutions in India. After its merger with Allahabad Bank on 1st April 2020, IB is India’s seventh-largest bank. Moreover, with more than 100 million customers vesting their trust in Indian Bank, it comes as no surprise that scores of aspiring homeowners turn to the lender for a housing loan.

However, availing such a credit facility requires considerable financial planning. Otherwise, it may later saddle the borrower’s finances. Thus, prospective homeowners may opt to utilise the Indian Bank home loan calculator to chalk out their repayment plan for such a loan.

What is the Indian Bank Home Loan Calculator?

When a borrower avails a home loan, the financial institution pays off the amount in whole or in parts to the property seller or realtor. This individual then repays such loan in fixed monthly instalments over a chosen tenure, along with interest.

The Indian Bank home loan EMI calculator facilitates this instalment calculation. Individuals can enter the principal, tenure, and interest rate in this online tool to find out the EMIs they need to pay before availing a home loan from Indian Bank.

How is Indian Bank Home Loan Calculated?

Home loan EMI calculation requires three variables – the loan amount, rate of interest, and the repayment term. Individuals thus need to enter these variables into an Indian Bank housing loan EMI calculator to compute the monthly instalment amount. The formula used for EMI computation is –

EMI = [P x R x (1 + R)^n] / [(1 + R)^n-1]

In this expression, P stands for the principal or loan amount; R is the rate of interest divided by 12, and n denotes the tenure in months.

An example may provide further clarity into how the Indian Bank home loan calculator functions.

Ms Joshi is buying an apartment in Mumbai. To finance her purchase, she decides to avail a housing loan from Indian Bank, details of which are mentioned in the table below:

Principal  Rs. 80 lakh
Tenure 25 years or 300 months
Rate of interest 9.5%

As per the aforesaid formula, her EMI would be –

[8000000 x 0.0079 x (1 + 0.0079)^300] / [(1 + 0.095)^ (300 – 1)]

Or, EMI = Rs. 69,896

Thus, Ms Joshi would need to pay Rs. 69,896 as EMI for her loan of Rs. 80 lakh over a period of 25 years.

Which Factors influence Home Loan EMI?

Three primary factors that carry weight in instalment calculation are:

1. Principal

The loan amount directly acts upon the EMI. When using the Indian Bank home loan calculator, individuals may note that the instalment amount goes up when they increase the principal amount and vice versa.

2. Repayment term

A longer tenure reduces the EMI amount but increases the cost of a loan. That’s because interest accrues over a more extended period. Conversely, a briefer tenure results in higher EMIs, but the total interest is lower.

3. Interest rate

A higher interest rate increases the total cost of a loan and vice versa. Resultantly, the monthly payout directly varies with a change in the rate of interest, which depends on the borrower’s credentials, like their credit score, income, etc.

What are the Benefits of an Indian Bank Home Loan Calculator?

A home loan calculator features several benefits for the user. A few of these are:

  • Individuals can calculate the EMI amount within seconds using a loan calculator. Thus, it allows them to try out different variables, like adjusting the tenure, to reach an affordable instalment amount.
  • Aspiring homeowners can learn the cost of loan they need to incur beforehand with this online tool.
  • It is simple to use. Hence, even individuals with minimum technical know-how can utilise the Indian Bank housing loan calculator.
  • Borrowers can plan their repayment efficiently with the calculator’s aid.

Availing a home is a significant responsibility. Thus, individuals shall ensure they have a sound repayment plan in place before committing to a housing credit facility.