In the west, under the umbrella of mortgage loans fall both home loans and loans against property. However, in India, when we talk about mortgage loans, we essentially mean loans against property or property loans.
Loans against property are also known as property loans or simply LAP. People who own land or residential or commercial property can pledge it as collateral and secure a loan against it. This loan is known as a loan against property and offers many benefits. Low mortgage loan interest rates, long repayment periods, high loan sanctions, zero end-use restrictions and tax benefits (in specific cases and depending on how you use the loan funds), make these loans a very popular financing option.
However, one of the key requirements of these loans is that they require the borrower to pledge a property they own and is in their name as collateral. This automatically makes loans against property a slightly risky borrowing option, even when availed of after thorough financial planning. Therefore, all mortgage loan applicants are advised a few simple things.
One of the first things they are told is that they must always use a loan against property eligibility calculator to ascertain the loan amount they are eligible for and will get approved for. Knowing what you can get and applying for the same allows you to get approved for the best possible loan terms and conditions, including low home mortgage loan interest rates. Second, all loan against-property applicants are also advised to use a mortgage loan calculator or LAP EMI calculator.
A mortgage loan calculator or LAP EMI calculator is an online tool that lets you calculate the loan EMIs you will need to pay every month if you decide to go for your selected combination of loan value and tenor. The online mortgage loan calculator works on three pieces of information: the mortgage loan interest rate offered, the loan tenor opted for and the loan amount selected.
Once these three pieces of information go into the calculator, the mortgage loan calculator delivers results which include the monthly payable EMIs, the total interest that one will pay on the home mortgage loans and the total cost of borrowing funds along with an elaborate amortization schedule, which is essentially a breakup of all your loan EMIs and how they will be divided to cover the principal and interest components of your loan.
The amortization schedule provided by the LAP EMI calculator also allows loan applicants to understand how much of the total loan amount they have already repaid and how much of the total loan amount remains left to be paid at the end of each month. Property loan EMI calculators also offer many other benefits.
Below we discuss some of these benefits:
- Mortgage loan calculators are quick and accurate. Loan applicants can trust them for accuracy every time they use it. Unlike human beings, the mortgage loan calculator does not tire of doing the same calculations again and again and delivers accurate results every single time. In other words, the mortgage loan calculator completely eliminates all chances of any kind of error entering into one’s calculations.
- The mortgage loan EMI calculator helps with repayment planning. When a person know their EMIs even before they have started the loan application process, it makes it much easier for them to first ascertain the affordability of the loan and then do monthly budgeting in such a way that they can comfortably pay the loan EMIs they must pay. By allowing loan borrowers to do budgeting, the mortgage loan EMI calculator saves borrowers from late payments and penalties, thereby allowing them to keep the cost of borrowing funds as low as possible.
- Lastly, the mortgage loan calculator provides loan borrowers with the chance to ascertain the most ideal time for prepayments and foreclosure and save the maximum they can through this facility. The calculator does so through the mortgage loan amortization schedule it provides.
In short, the mortgage loan calculator is a tool that all loan against property applicants must use for checking the affordability of their loan as well as for budgeting and repayment planning. The calculator is also free to use. So, one need not worry at all about increasing the cost of borrowing funds when they use this calculator.