When it comes to home mortgage loans, LIC Housing Finance Limited is considered one of the most prominent financiers in India. It is a subsidiary organization of the Life Insurance Corporation of India with its corporate office situated in Mumbai.
The housing finance company was established in 1989 to financially assist individuals who wish to construct or purchase a residential property. Later, LIC Housing Finance Limited became a public company in 1994, promoted and controlled by the LIC of India.
They offer housing loans to Indian and Non-Indian residents as well as pensioners. Also, while deciding EMIs, borrowers can use the LIC home loan calculator and go for the most convenient loan amount that keeps EMIs affordable.
LIC Home Loan EMI Calculator
Typically, LIC home loans denote high-value funds availed for an extended repayment timeline, and thus, the total payable amount becomes considerably high. Therefore, borrowers need to be careful when opting for an instalment amount.
As a convenient option, one can consider using the LIC home loan EMI calculator that computes the payout options within seconds. Individuals need to provide their desired advance amount, applicable interest rate, and repayment term to the calculator, which displays the resultant EMI accordingly.
Individuals can also alter the values of tenure and loan amount component to find out the best loan option for them.
How Does LIC Home Loan Calculator Compute EMIs?
The LIC home loan calculator 2020 computes EMI based on the following formula –
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
- P signifies the principal amount
- R signifies an applicable interest rate
- N signifies the repayment term in months
Now, here is an example to help you understand the computation process of the LIC home loan calculator:
Nandini is a working woman who has obtained a housing loan of Rs. 35 lakh at a 7% per annum interest rate for 15 years.
The values entered in the calculator are tabulated as under –
|P or Principal value
|R or Rate of interest
|Tenure of repayment
Based on the formula –
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
= [35,00,000 X 7% X (1+7)^180] / [(1+7)^180-1]
Therefore, Nandini has to pay Rs. 31,459 as EMI for the next 15 years until she chooses to prepay or foreclose her loan account. Furthermore, the LIC housing loan calculator also displays the total repayment liability that she has to pay amounting to Rs. 56,62,618.
What are the Factors that Influence Home Loan EMIs?
Based on various factors, home loan EMIs can vary across the product range. These influencing factors are –
- Tenure – If individuals choose a longer tenure, it results in monthly instalment reduction, making repayments more affordable, and vice versa.
- Loan principal – If borrowers prefer to opt for a higher loan amount, it results in a proportionate increase in the instalment amount too, and vice versa.
- Interest rate – Although lenders determine interest rates, an applicant’s qualification measures like age, repayment capacity, credit profile, and similar other factors can influence it. Notably, an expensive rate of interest keeps the EMIs on a higher side.
What are the Benefits of LIC Housing Loan EMI Calculator?
Borrowers can benefit from a LIC housing loan EMI calculator in the following ways –
- A LIC housing loan calculator does not leave any room for errors. So, borrowers can consider its accuracy when computing EMIs.
- EMI calculators can help compare multiple instalment options. Therefore, individuals can choose the best monthly payout as per their repayment capacity.
- It is a simple tool that is easy to use, even for those lacking any technical know-how.
Housing loan aspirants must, therefore, learn how to use the LIC home loan calculator to make an informed decision. They must also remember that a fractional difference in a home loan amount or interest rate can increase the total outstanding significantly as it is a high-value advance that comes with an extended tenor. So, borrowers must be careful about all the terms before applying for it.
Is the LIC home loan EMI constant or changes with an interest rate change in future?
Generally, the home loan EMI remains the same unless the customer requests for a change and the same is approved by LIC Housing Finance subject to its eligibility conditions
WIll there be any change in the home loan EMI in case of prepayment?
LIC Housing Finance provides prepayment without any charges in case of floating rate home loans. When a prepayment is made, the outstanding balance of the principal amount on your home loan reduces. In this case, you can either keep the EMI unchanged and reduce the loan tenure or reduce the EMI and keep the loan tenure unchanged. You can check the EMO on your home loan anytime by using the LIC home loan calculator.
How accurate is the home loan calculator of LIC?
The calculator present on this page uses certain codings that are programmed to calculate accurate results. Not to mention, make sure that the values entered by you are correct.
What is the use of calculating LIC Housing Finance home loan EMI before even taking a loan?
By calculating the EMI beforehand you can easily identify the amount you have to pay each month as EMI.