What is Loan Against Property EMI Calculator & How Does it Work?


The EMI you pay for a loan against property is a fixed monthly amount that includes both the principal and interest payments that the borrower must make until the loan is completely repaid in full. Initially, the interest portion of the EMI constitutes a significant portion of the total EMI. Later on, a larger portion of the Loan is dedicated to principal repayment.

If you know the EMI in advance, it assists in determining the appropriate loan amount to apply for depending on one’s financial situation. In determining the amount of money repaid on LAPs, the interest rate is an important factor. Various banks and financial institutions charge different interest rates.

Mortgage Loan Calculator: Factors to Consider

When it comes to loans secured by real estate, a mortgage loan calculator is a specialized online tool that makes it simple to compute monthly payments. The best practice is to double-check your liabilities before applying for a loan against property online, which is where this tool comes in handy. It assists you in calculating the monthly installment by taking into account three factors, namely:

Loan principal:This is the loan amount that has been requested. For a loan secured by real estate, the maximum amount to be borrowed is up to 90 percent of the property’s market value. Example: If an immovable asset is valued at Rs.50 lakh, the resulting principal sum cannot exceed Rs45 lakh in total value. When it comes to real estate loans, the maximum amount to be borrowed is typically 80 percent of the property’s value.

Repayment tenor:Individuals have the option of repaying the Loan over up to 20 years. This is when the credit must be repaid to be considered settled. Loans with a high monetary value, such as loans secured by real estate, have greater repayment flexibility. This factor is critical to the proper operation of the mortgage loan calculator.

The annual percentage rate of interest:The final factor to consider when using a mortgage loan calculator is the interest rate applied to the Loan. This mortgage loan interest rate is determined by several factors, including the borrower’s eligibility and current market conditions.

As soon as you enter the information into these three fields, a mortgage loan EMI calculator will calculate your monthly installment amount, your total interest expense, and the total cost of your mortgage loan. Moreover, some more sophisticated calculators display the entire amortization schedule.

How to Use LAP EMI Calculator?

The EMI Calculator for loan against property calculates the precise EMI amount based on the principal amount, interest rate, and loan tenure. To calculate the EMI, follow the steps outlined below:

  • Enter the principal amount of the Loan you wish to take out
  • Specify the annual percentage rate of interest that the lender has offered
  • Specify the tenure i.e., the length of time you would like to repay the amount you owe on your Loan and click “Submit.”

Once all necessary information has been entered, the resulting EMI amount will be displayed. You can compare the EMI amounts for various tenures to find the one best suits your financial situation.

What Are the Benefits of Using an Online EMI calculator for Loan Against Property?

You can estimate your monthly payments with the help of an online loan against property EMI calculator, which provides accurate results and allows you to compare EMIs on different property loan schemes in real-time.

Saves time:You can save time by calculating your EMI in seconds as soon as you enter the loan details on our website.

Give accurate results:Manually calculating an EMI is complicated, and the likelihood of making a mistake is high, leading to you making the wrong decision. You can make the best decision possible using an online mortgage EMI calculator.

Plan your finances:Your monthly mortgage loan EMI must be known in advance so that you can budget for it in your monthly budget. Always choose an EMI that is within your financial means and will help you avoid any future financial hardship in the future. Continue to maintain a favorable income to expense ratio.

Multiple schedules can be compared:You can also compare amortization schedules and monthly installment payments for various loan tenures and interest rates and then select the EMIs that best suit your repayment or servicing capabilities.

Formula for EMI Calculator for Mortgage Loan

Manually calculating your LAP EMI is time-consuming and difficult, especially if done in a hurry. If you want to figure out your monthly installments, you must enter the loan amount, interest rate, and loan tenure. The mortgage loan calculator employs the following formula:

  P*r* (1+r) ^n/ ([(1+r) ^n]-1)

The loan amount you wish to borrow is represented by the letter P in the formula above.

R represents the monthly rate of interest of loan against property.

N is the length of time required to repay the loan in months.

It is recommended that you use a loan against a property calculator because it is a very simple and time-saving process that allows you to calculate your EMI in seconds and saves you money.

EMI Calculation Example using Loan Against Property Calculator

A loan against property installment calculator, also known as a Mortgage Loan EMI Calculator, can be used to figure out how much interest you will pay throughout your Loan, which is especially useful if your Loan is for a long period. The longer the loan term, the higher the mortgage loan rate you will pay. The following shows a comparison of the EMI for a loan of Rs. 1 lakh over a range of loan tenures:

The lowest EMI for a maximum tenure of 20 years is ₹ 769 per lakh rupees at the lowest Loan against property rate of 6.90 percent. In this case, you will be required to pay an interest rate of ₹ 84,560 per annum on a loan amount of one lakh rupees over twenty years.

If you decide to take a loan for only 5 years, you will have to pay a higher EMI of ₹ 1,975 per month, even though the interest rate remains the same. Using this example, you would pay a total interest of ₹ 18,500 on your loan amount of 1 lakh over a 5-year period, which is less than half of the total interest you would have paid on a 20-year loan.

How is principal and interest split between Mortgage Loan on Home and EMI?

A typical EMI for a loan against property Mumbai comprises two parts: the principal and the interest rate. When a loan is first taken out, the interest component is greater, decreasing over time. When you pay an EMI, you pay off all of the interest first, and the remaining amount is credited to your account as principal. Every month, interest is calculated on the amount that remains unpaid.

Assume you have taken a loan for ₹ 1 lakh for 12 months at a rate of 12 percent. The monthly installment for the Loan will be ₹ 8,885.

The interest component of the first EMI is equal to (12/12*100)*1,00,000 = ₹ 1,000.

The principal component in the first EMI equals 8,885 – 1,000 = ₹ 7,885.

This means that the interest amount will be calculated on an outstanding principal of ₹ 1,00,000 – ₹ 7,885 = ₹ 92,115 in the next EMI installment. By the end of the term, the interest component will have been reduced to zero, and the amount you pay as an EMI will be the amount of principal that has remained. This depicts how interest and principal are divided in an EMI.

Benefits of a Loan Against Property vs. Personal Loan or Business Loan

A loan against property online is much beneficial than a typical personal loan or business loan for the following reasons –

Lesser rate of interest: As LAP is a secured loan, it will attract a much lower interest rate than an unsecured loan such as a Personal loan.

Flexible repayment: While a personal loan has a tenure of a maximum of 5-6 years, a mortgage loan often comes with a tenure of up to 20 years to reduce your monthly repayment burden.

Easy documentation and fast approval: While a personal or business loan often involves extensive documentation, a loan against property has a simple documentation process. As your property is held as collateral by the bank or lender, they often approve the loans much quicker than other forms of loans.

You retain the ownership: Though your property is offered as collateral, you still retain the ownership of the property and can continue to live in the same property.

Pre-payment options: Every lender offers flexible pre-payment and pre-closure options to the borrowers without paying any penalty for closing the loan early.

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