Indian Bank Home Loan EMI Calculator

Indian Bank Home loan EMI Calculator

Indian Bank is a very progressive bank providing excellent banking and financial services. With the merger of Allahabad Bank, Indian Bank has become the 7th largest bank in India today. Indian Bank has the proud distinction of having 100 million customers under its aegis. 

The loans and particularly the Indian Bank Home loan division is one of the most popular of the Bank’s services. Indian Bank has thoughtfully come out with several innovative home loan schemes that make them very attractive to its wide customer base. One of the most unusual types of Home loans is the IB home loan advantage where the home loan has a provision to be converted into a 100% term loan and there is a facility of 30% overdraft on the amount. There is also the Indian Bank Home Loan Combo where an applicant can choose between 4 other loans such as a vehicle loan, an IB pension loan which will be offered at discounted interest rates along with the main housing loan.

Preparing for an Indian Bank Home Loan

Building a home is one of the major activities in a person’s life and it involves considerable financial planning to space out a loan over 20 to 30 years. A readymade home will cost anywhere over Rs 30 –40 lakhs and buying a plot and constructing a home will not cost less than Rs 25-30 lakhs. The challenge in financial planning is how much to invest in a home and what portion to take as a loan. Indian Bank offers 80-90% loan to value ratio on property and prospective borrowers will need to arrange 10-20% of the value of the property from their funds or savings. The challenge is to plan EMI‘s in such a way that borrowers can comfortably afford the EMI’s, manage domestic expenses and also be able to save some money for the future including education and marriages of children and also planning retirement.

Using the EMI calculator

Indian Bank has helped prospective borrowers to make some initial calculations. The excellent portal of the bank helps borrowers to check their eligibility for loan amounts based on their age, income potential and location of property. They will have learnt the benefit to maintain a high CIBIL score above 800 and apply jointly in order to get the interest benefit of a female applicant or co applicant.

Armed with the knowledge of the type of loan, the maximum loan amount eligible, the maximum  loan tenure and the applicable interest rate, Prospective borrowers can now use the Indian Bank home loan calculator to try out different combinations of loan amount, tenure and interest rates and find out the different EMI’s that the system throws up as answers. This will help borrowers to try repeated combinations and zero down on the most suitable EMI. Working backwards, this facility will help borrowers to decide on the loan amount and the tenure.

Eligibility Criteria

How to use the EMI calculator

The applicant/s need to first check their eligibility of loan amount and tenure based on their age and income. 

Using the EMI calculator is very simple.  The loan amount and tenure can be selected by drag bars which can be increased or decreased.  Applicants need to take care to input the loan amount, tenure and interest rates they are eligible for in order to get a realistic EMI value.  

The EMI will be displayed on the screen. A pie chart will display the interest and the principal component in the EMI.                                            

FAQs

Will an increase in the tenure bring down the EMI?

Yes. An increase in the tenure will reduce the EMI but increase the coast of a loan. Calculations show that for a loan amount of Rs 30 lakhs over a 30 year period at an interest rate of 9% per annum, a borrower will end up paying almost twice the loan amount in 20 years and almost three times the loan amount in 30 years.

Will there be any preclosure charges if parts of the loan principal are paid back as and when extra funds are available and will thus reduce the tenure of the Indian Bank home loan?

Yes, periodic foreclosures are allowed by Indian Bank and there are no foreclosure or prepayment charges. Borrowers have the option to reduce the tenure and adjust EMI’s for the balance portion accordingly. It is better to reduce the tenure and retain the same EMI by means of the prepaid amount being deducted from the balance.

Can the revised EMI calculation on deduction of the PMAY subsidy in an Indian Bank Awas home loan be done by the EMI calculator?

The PMAY subsidy can be calculated at the rate of 6.7% for EWS (economically weaker section) and LIG (Low income group) and 4% and 3 % respectively for people from the MIG I and MIG II groups. The subsidy works out to Rs 2.67 lakhs to Rs 2.3 lakhs. This amount is deducted from the loan amount and the balance can be used for the EMI calculation. For instance, if a person has applied for Rs 20 lakh loan and receives Rs 2.3 lakhs subsidy, the net loan works out to Rs 17.7 lakhs. The EMI calculator can now be used and the net EMI on a 20 year tenure at 7.25% interest works out to Rs 14000 approx.       

Can the EMI calculator of Indian Bank determine the actual interest rate and loan amount based on the applicant’s age and income eligibility?

No. The eligibility calculator and the EMI calculator are separate. An applicant will need to determine his or her eligibility of the loan tenure and loan amount on the basis of age and combined income of both applicant and co applicant and use the eligible ranges in the EMI calculator to evaluate the EMI. 

What is the basis of the calculation of the EMI in the Indian Bank EMI calculator?

The EMI calculator of Indian Bank uses the formula    EMI= PxR (1+R) (to the power) n/ (1+R) (to the power) n-1 where P is the loan amount, R is the rate of interest divided by 12 and ni s the tenure of the loan in the number of months.