Why should you use a home loan calculator before reaching out to a creditor?

Why should you use a home loan calculator before reaching out to a creditor?

Often you will see people using calculators or searching for one on the Internet before they reach out to a creditor to know more about the particular loan type and the interest to be paid. It automatically raises a question in your mind as to why calculators are so important when the creditor or the consultant can pitch the entire scenario. Well, there are several reasons why using the home loan calculator before applying for credit or reaching out to the creditor has proven beneficial.

If you are confused about using the loan calculator or have doubts about the results, the following discussion will help you clarify. In this article, we have illustrated some of the major benefits you can enjoy with the help of the calculator for your home loan.

A calculator gives you an estimate of the interest rate and the total EMI

First and foremost, the calculator will give you an insight into the interest rate and total EMI payable for a home loan. It would be best if you remembered that this particular credit type is not equivalent to a personal loan or any other loan you can take from the creditor.

This is because the principal amount of the home loan is usually 80% or 90% of the total property valuation maximum. Therefore, if the property costs you around INR 30,00,000, you can opt for INR 27,00,000 as the loan type. 

This will automatically increase the total EMI to be paid due to the huge lump sum amount as the principal. If you use a home loan calculator, you can easily know whether you can pay the EMI every month.

You can easily form a budget with the help of the loan calculator

Whenever you take a home loan with a high principal amount, it’s better to form a budget before you reach out to the creditor and discuss the loan eligibility criteria and requirements further. 

However, if you have yet to learn about the EMI to be paid or the conditions in which the interest rate might change, forming the budget will become next to impossible. This is where the home loan calculators come in, as they will give you an idea of the payable amount and help you accurately form the budget. 

The calculator will show the total debt amount based on your credit score

Certain special calculators will help you to understand how your credit score can alter the total debt amount that will be payable from your side once you take the loan from the creditor. For instance, if you borrow INR 20,00,000 and another person also borrows the same amount. 

Ideally, the EMI should be the same. However, if your credit score is 860 while that person’s score is 750, you need to pay less compared to him. This can be easily known when you use the combined credit score and loan EMI calculators before reaching out to the home loan creditor.

You can compare the interest rates and EMIs payable to different creditors with the calculator

Usually, when you choose private creditors for a home loan, the interest rate charged, the total repayment term, and the principal amount will vary. 

Using the calculator is an ideal option to know the differences between each condition and make a well-informed decision. Besides you can also use the home loan eligibility calculator to know if you can get the credit without exposing yourself to the risks.


In this article, we walk you through the benefits you can enjoy with the help of the home loan calculator before you reach out to the creditor and apply for the credit. Based on this, you need to decide which calculator will be able to provide you with the most accurate results about the EMI, differences in interest rates, and so on.

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