So often when you sit to decide on a financial matter like availing a home loan, all eyes remain on the mathematics, isn’t it? At first glance, the offers may seem attractive. But when you go deep into the matter, you would find a sea of troubles waiting to drown you financially. Even with your favourite HDFC Home Loan, you must introspect the offer from the angle of mathematics before choosing an offer. One that helps do so is HDFC Home Loan EMI Calculator. Let’s get into the basics of it to ensure the repayment remains smoother and not hit your budget. How Does HDFC Home Loan EMI Calculator Work? The performance of the calculator depends on three variables – loan amount, the rate of interest and tenure. As soon as you enter these in the calculator, which is there online, you will get to know the EMI, which stands for equated monthly installment. The installment carries a portion of both interest and principal amount payable each month to HDFC. So, the calculator would also show the amount of interest likely to be paid, in addition to the monthly installment. As far as quantum of finance is concerned, HDFC offers loan of more than ₹75 lakhs at an interest rate of 8.40%-9.05% per annum for as long as 30 years. Depending on the loan amount, the rate of interest can vary. So, when you apply for up to ₹30 lakhs, be ready to pay at 8.40%-8.90% (women) and 8.45%-8.95% (others). On the other hand, loan amount beyond ₹30 lakhs will be charged at 8.50%-9.00% and 8.55%-9.05% for women and others, respectively. Can You Bargain on Interest Rate? Yes, you can. For that, you must have a solid repayment potential and a good credit score. While the former is gauged through the income you earn and the savings you realize month-on-month, the latter is a result of the credit behaviour you portray or have portrayed while servicing a debt. So the credit score must be above 700 or 750 as a testimony to your strong debt servicing capabilities. Generally, the score ranges between 300 and 900. Above, you must have seen HDFC Home Loan Interest rates in the ranges. If you have a credit score above 750, you are in with a great chance to get the lowest limit of the rates offered across the loan amounts. As a home loan runs for long, a difference in the interest rate can lead to a drastic reduction in the overall outflow of interest. The savings so realized can be utilized in profit-making investments to bolster your financials. How Should You Choose Your Tenure? Yes, you can avail a loan for up to 30 years. But that’s not the ideal way to go about as you could go on to disturb your finances doing so. A longer tenure results in a greater outflow of interest compared to a shorter one. A tenure should be such that the EMIs can be accommodated while containing the overall payment of interest. So, if you were planning for a 25-year home loan of ₹50 lakhs from HDFC, you better rejig by shortening the tenure to 20 years. Let’s check the effects of two tenures to their respective repayment, assuming the interest rate to be 8.60% per annum in each of the cases. With a 25-year loan, the EMI and interest are likely to be ₹40,599 and ₹71,79,657, respectively. In contrast, a 20-year loan will yield to a monthly installment of ₹43,708 and interest repayment of ₹54,89,953. You could easily see the difference. You may be paying a higher EMI of ₹3,109 (43,708-40,599) but would reduce the interest by as much as ₹16,89,704 (71,79,657-54,89,953) by going for 20 years. With so much of interest that can be saved, you can adjust your budget accordingly to suffice a slightly higher EMI payment by choosing a shorter tenure.