How to Calculate and Boost Your Home Loan

How to Calculate and Boost Your Home Loan

The amount that a borrower may be able to afford as a home loan significantly rests on the amount of the EMI or equated monthly instalment. The EMI needs to be calculated when applying for a home loan. You will also need to calculate your EMIs when transferring your loan to a new lender. Doing so is extremely seamless; all you need to do is follow the steps outlined below. 

How to Calculate Your Home Loan

  1. Deciding Your Loan Amount

Getting an idea about loan eligibility starts with your total annual income. For this reason, you can access a home loan eligibility calculator. The loan amount may vary depending on various factors, including your profession and repayment capacity, to mention a few. In addition to this, the amount loaned to you also depends on the cost of the home you intend to purchase.

Generally, the maximum amount disbursed happens to be 90% of your property value. However, many lenders provide just 80%. If your loan amount is high or if your repayment capacity is lower, the amount disbursed to you is likely to be a smaller percentage of the total. Use a home loan eligibility calculator to estimate the maximum amount you can get for better planning.  

  1. Getting The Best Rate of Interest

While all the borrowers like getting a low interest rate on home loans, this isn’t always possible due to a variety of reasons.  Every lender has its own rules based on the property and the borrower segments. Let’s say that a majority of lenders offer the best rates to salaried customers. However, some lenders also offer good rates to borrowers having high credit scores. Alternatively, many lenders give special interest rates to female borrowers. Check various offers carefully before making a decision.

  1. Finding The Correct Loan Tenure

Generally, home loans happen to be long-term, where some loans may even last more than 30 years. However, you must consider that a longer tenure also translates to a larger amount being paid as interest. 

Some allow the tenure with the loan repayment completed by the time the borrower reaches 60 years of age. Thus, when someone is 30 years old, they may be able to get a loan for 30 years. However, if someone is 45 years old, the loan tenure decreases to 15 years.

Now that you know how to calculate your home loan, here’s how the process works. 

The Process to Calculate the Loan EMI

When calculating the loan EMI, it is imperative to learn a bit about online calculators. They help in easily evaluating the amount of the online home loan EMI. You can find them on the aggregator portals as well as websites on the internet.

If you want to use the formula of MS Excel, read on. Assessing your own EMI calculations on MS Excel is a seamless affair. For this, all you need is to follow the given formula and calculate your EMI:

EMI is equal to

[P {R/100} multiplied by {1+R/100} ^n] / [{1+R/100}^ n-1]


  • P is the principal loan amount
  • R is the rate of interest for each month
  • N is the number of instalments on the monthly basis

Strategies to Boost Your Home Loan Eligibility

In general, there are multiple ways in which you can enhance the possibility of getting home loan approved. Some of these include –

  • Selecting a longer tenure
  • Improving your credit score and making yourself risk-free and creditworthy
  • Adding a second source of income – for instance, your side-business income besides your primary source.
  • Adding your spouse / family member with a good credit score and stable income as a co-applicant to boost your home loan eligibility 
  • Opting to pay a higher down payment
  • Pre-paying your existing loans

Wrapping Up

Thus, this post compiles a detailed overview of the tactics to calculate your home loan, the process to evaluate the EMI amount, and, finally, strategies to boost your home loan eligibility criteria. With the pointers above, you can see how simple the process of availing a home loan becomes. If you face any problems, get in touch with Grihashakti, as their experts will guide you through the entire process. 


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