A Loan Against Property (LAP) is a way to borrow funds by using your property as security. Before you take this loan, it’s important to know how much you’ll need to pay each month. This is where a loan against property EMI calculator helps. It calculates your monthly payment, called an EMI (Equated Monthly Installment), based on the amount you borrow, the interest rate, and the time period of the loan.
Although these tools are useful, mistakes while using them are common among individuals. Mistakes with calculations may lead to adverse financial decisions. Therefore, this blog post will walk you through the common mistakes to avoid when using a loan against property EMI calculator and how an excellent online loan app in India can make it easy.
1. Entering the Wrong Loan Amount
One of the most common mistakes people make is entering the wrong loan amount. Some people consider themselves qualified to borrow higher amounts than what the lenders finally allow them. It is always essential to confirm with the lender how much one can borrow, so check how much your property is worth.
The loan against property EMI calculator works best when you use the correct loan amount. If you put in the wrong amount, the results won’t be accurate.
2. Ignoring Additional Costs
The EMI calculator only calculates the basic loan amount, rate of interest and tenure. However, charges like processing fees, insurance, or even prepayment charges could further increase your loan cost. Most borrowers forget to add all those extra charges with the cost of the loan, which again costs you a bit more than expected.
While the EMI calculator can’t include these costs, it’s important to remember them when planning your loan. In addition,talk to your lender or check the best online loan app in India to understand all the extra costs involved.
3. Not Comparing Different Lenders
Some people make the mistake of using just one lender’s EMI calculator. Different lenders offer different interest rates and loan terms, which can affect how much you pay each month. If you don’t compare multiple lenders, you might end up paying more than you ideally should do.
By comparing offers from other lenders using an EMI calculator, you may avoid this error. You may achieve this with ease using a lot of online lending programs. To discover the best deal, compare loan offers from various lenders using the EMI calculator.
4. Not Considering the Prepayment Amount
Prepayment means paying off part of your loan early. This can reduce the total interest you pay over time, but some people forget to think about this when using a EMI calculator for LAP. If you plan to make prepayments, you should include this in your calculations to get the right EMI amount.
Some EMI calculators let you enter prepayment amounts to see how it affects your loan. If you plan to make prepayments, factor them into your calculations or ask your lender how they will affect your monthly payments.
5. Using the Wrong EMI Calculator
Not all EMI calculators are designed for LAP loans. Some people use a general loan EMI calculator. However, it might not consider factors like loan-to-value ratio which shows how much of your property’s value you can borrow or different interest rates for secured loans like LAP.
Hence, always use a loan against property EMI calculator that is specific to LAP loans for accurate results.
6. Ignoring Interest Rate Changes
If you opt to take a LAP with floating rates, then your EMI will change regularly as the rate changes, many forget to consider this factor when they calculate EMI and end up with an unsuspecting shock in the future.
If you have a floating rate loan, check if the EMI calculator lets you adjust for interest rate changes.
Conclusion
A loan against property EMI calculator is a helpful tool for planning your loan repayments, but it’s important to avoid common mistakes. Make sure you enter the correct loan amount, interest rate, and tenure, and don’t forget about extra costs. Always compare offers from different lenders to get the best deal. Using a best online loan app in India can make the process easier. These apps have accurate EMI calculators, lender comparisons, and up-to-date interest rates, helping you make better financial decisions.
