A loan against property is a secured loan wherein individuals pledge their own residential/commercial property or land as collateral to avail of a loan. Just like in a home loan, the bank owns the property papers until the loan is repaid by the individual. This type of loan is often taken by individuals when they need financial help to fund education, medical expenses, a wedding or even for expansion of business. The loan against property is repaid through equated monthly instalments (EMI) to the lender over an agreed tenor and interest rate. Before taking any kind of loan, it is always better to evaluate your finances to understand your capability to pay the EMIs. Loans against property can be of different tenors and interest rates tend to vary from bank to bank. It is better to know the EMI before opting for the loan to manage your funds wisely. This is where a loan against property EMI calculator will help you.
What is Loan Against Property EMI calculator?
The loan against property EMI calculator is an online tool provided by financial firms on their webpage. This tool helps borrowers calculate the monthly EMI for repayments on their loan amount. All you need to do is fill in the following details:
Principal – This is the loan amount required or borrowed. In LAP, an individual can avail an amount of up to 75-80% of the property value, to be pledged as collateral to the bank. The amount sanctioned depends on many factors, like age of the property, eligibility and repayment capacity of the borrower.
Interest rate – This is the rate of interest levied by the lender based on the market. The interest rate amount contributes to a major portion of the repayment amount in the initial years of the loan tenor and is higher on longer tenor and lesser in short tenor loans.
The tenor of the loan– Tenor is the period opted for repaying the loan amount. The tenor in big loans like loans against property or home loans is generally more due to the large sums involved. The tenor in LAP Loan is provided for up to 20 years.
Once the above three details are filled in the calculator, the LAP EMI calculator instantly computes the results and give you the details. You can play around with different combinations of values to come up with the most workable EMI.
Know how to Calculate LAP loans with the help of an LAP loan calculator
Manual calculations of loan EMI
If you take a loan amount of Rs.50,00,00 for 216 months at an interest rate of 7.2%, here is the mathematical formula to calculate the EMI:
EMI = (P * R/12) * [(1+R/12)^N] / [(1+R/12)^N-1]
- P = the principal amount of the loan
- R = annual rate of interest
- N = number of monthly instalments
Based on this calculation the EMI would be, Rs.41,456.
But you don’t need to do this calculation manually as the online loan against property calculator does this for you at a click of a button. You will have to only provide details of the principal amount, rate of interest and tenor by moving the sliders left or right to desired values and the calculator will do the rest for you.
On the above amount, you will be paying an EMI amount of Rs.41,456 every month for a tenor of 18 years, translating to a total repayable amount of Rs.89,12,864. Lowering the tenor to 10 years will push the EMI amount to Rs. 58,571, but you’ll end up repaying to a lower amount of Rs.70,28,517 through the loan tenor.
Some calculators also provide the entire amortisation schedule.
Benefits of using the loan against property EMI calculator:
The online loan against property EMI calculator is an easy and simple way to calculate monthly EMI repayments. The 3-simple step calculator makes it easy to know the EMI on the loan amount instantly. This calculator can be used online from the ease of your home. The EMI calculator will do the calculations on your behalf and give you all the details of the breakup on the amount and interest that must be paid monthly.
- Makes Comparing Easier
Loan against property interest rates in India vary from bank to bank and depend on a borrower’s credit profile. You can compare this with the help of an online LAP EMI calculator. This will help you select the right bank which fits your criteria for the exact loan amount and which will provide you the low-interest rate as well as other benefits.
- Saves Time
The LAP EMI calculator saves your time and removes the chances of manual errors. The calculator gives instant results. All one has to do is go to their chosen bank’s webpage and fill in details, such as required loan amount, tenor, and the home loan interest rate offered by a particular bank, and the LAP EMI calculator will deliver results instantaneously.