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01 June 2011

Online Home Loan Calculators - The Facts

With the onset of the internet banking and paying off of all financial deals online, even home loans have become much easier to apply for. Nowadays many internet banking sites and financial loan lending institutions have online home loan calculators. With this available online you can easily get a calculated amount of EMI you have to pay if you go in for a certain amount of home loan.
How to calculate all these figures and what are the advantages of online home loan calculators  will be discussed in this post. Each website has different forms and online calculators to find out different things regarding home loans. All these have slots to fill up where any borrower can fill up their income and expenditure and amount available for repaying the loan or savings and assets. Then the total figure of loan available will come up in the slot.
How authentic are these is one big question? as far as I personally feel they may just be an guideline for a lay person to understand his finances and come up with an idea of how much loan they can afford. This may just be an beginning enquiry as there are many variables and differences involved. Each borrower has different requriements and financial priorities and hence these calculators may just be an guideline for further development regarding home loan application.
There are many advantages of online home loan calculators. Here many lenders and nationalised banks and private lenders have put up online help. Any borrower can get his personalised loan questions answered. Even phone numbers are given for guidelines and help lines are open for 24 hours for getting queries answered. Many online home loan calculating sites also have expert advisers who help you to understand how much loan you can apply for and how much it will be possible for you to repay within your financial capacity without much stress. They may also have representatives who can come up to your place and give free advice regarding home loans. All this information can be got right from your home at just a click.
The most important handicap of this online home loan calculators are that they do not consider many other aspects like the age of the borrower and the property applied for the home loan. As we all know under construction properties do not involve repayment of principal amount and only interest has to be paid as pre- EMI. Even age of the borrower is another very important aspect as the older borrower is considered with a critical eye from the lender's point of view. They have less productive years and thus will get home loans having higher EMIs and for a less repayment tenure. Simple slots require you to fill up your monthly income, and no mention is made of whether there are other earning members as this will make a substantial difference if the other spouse is also earning or there are other family members who are willing to repay the loan together. This increases the total incoming monthly income. Here the individual can fill up total monthly incoming money after calculating all the incoming amount monthly. Even other investments and assets are to be considered,  for this also,  will increase your financial standing for approval of a home loan.  Illegal constructions are not eligible for loans officially, though many private lenders may be open to this aspect  if other proofs of the borrower are available, though this loan may be available at a very high interest rate. Also the most important aspect which comes up is there is absolutely no mention about processing charges and other fees that are to be paid by the borrower for the application and processing of home loans. This calculations may sometimes give a misleading picture and the borrower when applying for a loan personally may get another fact and another figure. Always remember that nothing in this world is free, the lenders some how manage to take this amount from one place or the other, and they should since they have staff to maintain and other administrative charges involved during the processing of the loan. But this is better if they mention it before hand to the customer.
There are many sites who are now mentioning that these figures are for informative purposes and just for getting a basic structure of your loan repaying capacity and amount available as loan, and in no terms to be taken as the final amount to be got as home loan. Some how these calculators have become very popular on online financial websites as there is no fear on the part of the borrower and no risk involved, they can at their own convenience type a few details and get an rough estimate of the figure available as home loan. They can see adjustible loan tenures, repayment schedules and different structural formats for repayment of the home loans at a glance. They can select different variables and try out different options for repayment. Even consider paying off the loan within a small time frame work with large EMIs or consider a longer repayment tenure with smaller EMIs and check out the details. All this knowledge helps to choose the right home loan tenure and the comfortable loan repaying amount or EMI.
What if you want to pay off the loan earlier, pre-closure of home loans? again this is not mentioned on the online calculator. The penalty fees and other administrative charges are not mentioned anywhere. What if the borrower is not able to repay an installment due to some reason, or may club some EMIs to pay a larger amount, all these aspects are not considered in the calculator.
Thus we can see that though there are certain weak links with these home loan calculators they are the best for a first timer who has no knowledge regarding EMIs and home loans, loan tenures and loan packages, and for and the second home buyer who has lost touch with latest facts and figures. One can also go online and ask questions regarding home loans and get them answered by expert financial advisors and bankers who can guide you. Here the borrower also has many choices about different loan lending institutions and they can choose the best home loan lender who has an attractive package of offering home loan at lowest interest rate. With this opportunity of online help and advice many can think of buying their dream house and that to from the comfort of their home!

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