What should an individual do when he or she wants to purchase the desired home but short of funds? High real-estate prices always come as a hindrance for people who like to purchase their homes. For such people, several lenders provide home loans at affordable interest rates. With the facility of a Home Loan, customers can easily get the required home loan amount for a fixed period. When we talk about the top banks of India, the name of State Bank of India (SBI) comes at the top. SBI Home Loan Interest Rate is one of the most affordable interest rates among customers.
A lot of people don’t know the importance of Home Loan Interest Rate while going for a home loan and end up mismanaging their finances. Let me tell you how? A home Loan is considered to be a big-ticket purchase as most people buy one home in their lifetime. So, when you opt for a Home Loan and interest rates are high, you will end up paying a higher interest amount during the loan tenure. This is why you should understand the importance of the SBI Home Loan Interest Rate that we will talk about in this article. Other than this, we will also talk about how SBI Home Loan EMI Calculator works. Keep reading to know more!
How SBI Home Loan Interest Rate Affects your Repayment Amount?
The first and foremost thing that you should know is Home Loan Interest Rates directly affect your repayment amount or commonly known as EMI Amount. This amount consists of a portion of the principal and interest amount. So, the higher the interest rates, the higher will be the EMI amount and vice versa.
This is the reason, every individual wants to opt for lower interest rates when going for any kind of loan. Let’s understand this with an example to know how SBI Home Loan Interest Rate affects your EMI amount.
Suppose an individual wants to opt for an SBI Home Loan of INR 35 lakh for a period of 20 years. To understand the impact of interest rates, we are taking two different interest rates of 6.95% and 7.60% per annum.
On taking the interest rates of 6.95% per annum, the EMI amount would be INR 27,031, and the interest outgo will be INR 29,87,324.
On the other hand, when we are considering the rate of 7.60% per annum, your EMI amount will be INR 28,410 and you will need to pay an interest amount of INR 33,18439.
So, from the above results, you can see when you are considering a lower SBI Home Loan Interest Rate, you will be paying a lower EMI amount and also, lower interest amount. That’s why it is always advised to go for lower rates in your home loan to ensure maximum savings. Some other methods to save a huge amount are Choosing a shorter tenure, Opting for Prepayment before tenure and going for the Balance Transfer Facility.
How to use SBI Home Loan EMI Calculator?
Now, you must have been thinking that how did we get all the above results related to EMI amount and Interest Outgo? Well, for all these calculations, you can use the SBI Home Loan EMI Calculator with which you can get the EMI amount within seconds. Other than EMI, you also get Interest Outgo and Total Amount Payable.
To function this, you only need to put a few details such as Required Loan Amount, Interest Rate, and Required Tenure (maximum of 30 years). As soon as you will put all these details into the calculator, you will instantly get the results. The loan amount tends to change from one bank to another and depends on several factors such as your Property value, Monthly Income, Property Location, Existing Obligations, etc. After seeing these factors, the lender will decide the final loan amount.