Benefits of using the LAP EMI calculator

How to use a LAP EMI calculator?

 
The LAP EMI calculator is a free tool you can find on the websites of almost all lenders. The tool is simple to use and only requires the input of three variables. The result will appear on the screen after you input the information.
 
Here's the step-by-step guide to using this calculator.
 

Step 1: Enter the loan amount

On the calculator, you will find the adjustable slider. You can increase or decrease the loan amount using the slider until you arrive at the desired loan amount. However, while using the calculator, be aware of your property's current market worth. The lender usually disburses LAP up to a loan-to-value (LTV) ratio of 75%. 
 

Step 2: Enter the interest rate

The next step is to use the slider to enter the interest rate. Though the lender determines the final rate applicable to your loan, you can choose between the minimum and maximum interest rate range available on the website.
 

Step 3: Enter the repayment tenure

In the last step, you need to enter the repayment tenure. You can pick a tenure ranging from 1 to 15 years. 
 
Let's take a look at the following table to understand how the LAP calculator displays results after you use different combinations of repayment tenure.
 
Also Read: Understanding Loan against Property Interest Rates and Charges
 

Features of EMI calculator for LAP

 

• Easy-to-use:

  Using the LAP EMI calculator is remarkably simple. You only need to input three basic variables and the estimated EMI will appear on your screen.
   

• Convenient:

  You can use this calculator at any time, from the comfort of your home. You need a smartphone or desktop and an internet connection to use this tool. 
   

• Accuracy:

  The calculator's results are not susceptible to error as they are in the case of manual calculations.
   

Benefits of loan against property calculator

One of the most common queries associated with the LAP EMI calculator is 'What are the benefits of knowing your EMI in advance?' To address this query, we have come up with a list of benefits loan calculator offers. 
 

1. Budget planning 

   Regardless of the type of loan you take out, it is critical to know how much money you will need to set aside each month for EMI payments. Let's look at an example using the table above as a guide.
    
   Assume you earn Rs 2.5 lakhs every month. After paying for all necessary bills, such as your children's college fees, insurance premiums, and so on, you are left with only Rs 1.5 lakhs. The optimal repayment period for you in this scenario is either 10 or 15 years. This is because even after paying your EMI, you will have enough money to aid you if something unexpected happens, such as a medical emergency.
    

2. Plan your loan

   Managing your debts is much easier when you are aware of your monthly obligations beforehand. The amortisation table shows you how much you have paid toward principal repayment and how much you have paid toward interest, as well as your outstanding debts. In case you sense any uncertainty in your business in the near future, the amortisation table might help you reschedule your loans and negotiate better repayment terms.
    
   If you have not applied for a loan yet, keep your debt-to-income (DTI) ratio in mind. If your DTI rises beyond 50% after adding the LAP EMI, you should immediately consider requesting for a lower loan amount.
    

3. Helps in comparison

   The EMI calculator for LAP is beneficial when it comes to comparison. Remember that each lender's LTV ratio, interest rate, and repayment period are different. Some lenders may lend up to 75% of the market value of your home, while others will lend up to 60%. Similarly, different lenders' maximum payback terms can range from 10 to 15 years. As a result, an EMI calculator can help you find the lender best suited to your specific needs.
    

4. Deciding on prepayment

   As previously stated, the LAP EMI calculator helps analyse your outstanding debts. You can easily check how much money you can save on interest payments by making a prepayment of your loan. It also enables you to determine whether your current income and other financial obligations allow you for a foreclosure.
    

Also Read: Benefits of Loans Against Property for SMEs
 

Does prepayment reduce EMI or tenure?

 
You have two choices when it comes to partial prepayment of a loan against property. The first is opting for lower EMI, while the second is choosing a shorter loan term. If you choose to lower your repayment tenure, you can save a major chunk of money on interest payments. Whereas opting for EMI reduction will make it easier for you to settle your debt without sacrificing on your essential needs.
 
Here are a few things you must keep in mind while deciding on prepayment:
 

• Prepayment assists in increasing your credit score. It provides the impression to lenders that you have a steady income and can easily handle multiple loans.

 

• Prepayment might qualify you for a higher loan amount in future. 

 

• Prepayment is affected by the lender's repayment terms. Prepayment, whether partial or full, entails additional fees. Given the charges, prepayment is not a prudent alternative if there are just 4 to 5 EMIs left on your loan.

 

To Conclude

 
The EMI calculator for LAP is one of the most useful tools available when applying for a mortgage loan. This easy to use and free online tool aids you in figuring out the EMI you will have to pay if you apply for a specific loan amount. In addition, the LAP EMI calculator can compare the loan offers from different lenders without hassles, thus helping you find the most affordable loan as per your personal needs.