Buying a house is a dream of many, and a mortgage is often the easiest way to attain this dream. Punjab National Bank offers competitive home loan schemes with flexible tenures at competitive interest rates. If you intend to take a home loan of ₹13 lakh, it should be understood how much will be the EMI and how the growth of the loan will take place.
What is an EMI?
An Equated Monthly Installment basically refers to a fixed amount paid by a borrower to a lender on a monthly basis until the loan is fully repaid. So an EMI epitomizes every monthly sinking fund with an element of depreciation or wear and tear and also interest on the balance amount of the loan.
The major three bases for calculation of an EMI are the amount of loan, the rate of interest, and the tenure of loan. On understanding, these are very important parameters for a borrower to keep in perspective while looking at his or her finances for timely repayment.
PNB Home Loan Features
PNB offers home loans at attractive interest rates starting currently at 8.5 per cent per annum, and thereby maintains flexibility with payment schedules. It allows tenures apt for keeping finance alive, being anywhere in the range of 5 years and 30 years. The home loans from PNB also carry benefits like part-prepayment and minimal processing fees, thus enabling the borrower to meet monthly expenditures rather comfortably.
EMI for ₹13 Lakh Home Loan
Suppose you took a home loan for ₹13 lakh at an interest rate of 8.5 per cent per annum for 20 years. This EMI can be calculated by using the standard formula:
EMI = [P × R × (1+R)^N] / [(1+R)^N – 1]
Where P is the principal amount, R is the interest rate per month, and N is the number of installments per month.
Using this formula, the approximate EMI for a loan of ₹13 lakh over 20 years at 8.5 per cent interest would cometo ₹11,000 per month. Thus, at the end of 20 years, the payments will be inclusive of both principal and interest, and borrowers can accordingly plan their financial considerations.
Effect of Tenure on EMI
The length of tenure greatly influences the EMA. The longer the tenor, the smaller the EMI; however, the interest paid during the course will be fairly substantial. The shorter the tenor, the higher the EMI and the lesser will be the interest outgo. For example, in the case of the above ₹13 lakh, the loan would attract EMIs going as high as ₹12,500 per month if taken for 15 years instead of 20, but the total interest paid would be lesser in that case, which is a saving for the long term.
Tips to Manage Home Loan EMI
Have a tenure that will be suitable to your monthly income and expenditure to pay the EMI comfortably. Part-prepayments, if being done quite regularly, bring down the principal amount, which lowers both the EMI and interest amount. Using online EMI calculators available on the PNB website will help you plan well and decide upon the best loan structure for yourself.
Conclusion
A ₹13-lakh PNB home loan is a good choice for aspiring homeowners. Borrowers should plan their finances well with a monthly EMI of around ₹11,000 for a 20-year period at 8.5%. Now that one understands the scope of home loans