Loan-Eligibility

Loan Eligibility Calculator and Loan EMI Calculator

An eligibility calculator is to check how much loan amount can you get on the basis of your income and other details. These are available online with the bank or even at different marketplaces.  

You can check the eligibility with the help of a loan eligibility calculator. For instance, suppose you use a home loan eligibility calculator, the details you will have to provide are – Your monthly income, tenure you wish for and the expected rate of interest. Also, if there is any other loan running, if yes, its EMI.

On the basis of these, the calculator shows how much loan amount you can get. Mostly for home loans, lenders call the applicant for the query. Below is an example which will help you understand how the eligibility calculator works.

Example of Loan Eligibility Calculator Functioning

Suppose you are working in a renowned company and earning an attractive salary of ₹80,000 monthly. So, after deducting all your necessary monthly expenses, you are able to save around 50% of your monthly income.

The bank would take into account your monthly saving of ₹40,000 which can be used to repay the EMIs of your loan. Now, if you can calculate your amount, tenure and rate of interest, you can easily know the EMIs that you will have to pay every month.

Amount- ₹1 Lakh

Loan Tenure- 20 years

Rate of Interest- 8.55%

Your monthly EMI will be- ₹985

So, the maximum loan amount you can get for a home loan would be ₹1 Lakh x 40000/985 = ₹40,60,913 lakhs.

How Personal Loan EMI Calculator Works?

If you want to know the calculator works, you must know that the calculator is very simple to use. As you know that you have to mention the loan amount, interest rate and tenure in the calculator. For example, if you are taking a personal loan with the following details:

  • Loan amount₹2,00,000
  • Interest rate– 11.99% p.a.
  • Tenure–  5 years

The EMI, Total Interest Outgo, and Total Amount (Principal+Interest) will be as follows:

  • EMI4,448
  • Total Interest Outgo66,873
  • Total Amount2,66,873

For home loans, you just have to change the details of the loan amount, interest rate and tenure.

  • Loan amount₹20,00,000
  • Interest rate– 8.50% p.a.
  • Tenure– 15 years

The EMI, Total Interest Outgo, and Total Amount (Principal+Interest) will be as follows:

  • EMI₹19,695
  • Total Interest Outgo₹15,45,062
  • Total Amount₹35,45,062

EMI Calculation Formula

The calculation in the calculator is done with the help of the formula given-below:

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

where,

EMI = Equated Monthly Installment

P = Principal Loan Amount

R = Monthly Interest Rate

N = Number of Monthly Installments

There are eligibility calculators for all types of loans. You can check the details for any loan you want to take. Similarly, a loan calculator is there will tells you the monthly installment you will have to pay for the loan.

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