What Is The EMI For A 20-Lakh Home Loan?

A home loan is taken by individuals in order to purchase a property or a plot of land. It includes a high value of principal loan amount, which makes it a long-term loan. A loan for purchasing a home is secured when the property is taken as a mortgage. There are various banks and non-banking financial institutions offering housing loans.

The repayment scheme of a home loan is done with the help of equated monthly installments. The EMI scheme makes it flexible for borrowers to repay the loan within the loan term. The EMI for 20 lakhs will completely depend upon the borrower's decision. It depends on various factors. Let us discuss a few important points on which the loan installment amount will depend.

What is equated with monthly installments?

EMI, or equated monthly installments, is the repayment scheme of a home loan. The entire principal loan amount, along with the rate of interest, is paid in monthly installments throughout the loan term. The monthly EMI amount will completely depend upon the individual’s repayment capacity. Because the EMI amount is determined by various factors such as the principal loan amount, home loan interest rate, and loan term, it will differ from person to person. There is no specific EMI amount for a 20-lakh home loan. An individual needs to make the right decision while calculating the equated monthly installment with the help of a loan calculator.

Factors responsible for monthly equated installments

Loan tenure is one of the most essential factors that influence the equated monthly installment amount. Since the entire principal loan amount and rate of interest will be added and divided by the number of months, it has a huge impact. If the number of months is greater, the monthly installment amount will be low. Simply put, in a long-term home loan, the monthly installment amount will be low. Similarly, if an individual chooses a short-term loan, the monthly installment amount will be very high.

The second most important factor that decides the monthly EMI amount is the principal loan amount. If you take a high-principal loan amount, the monthly installment amount will be high. Similarly, if your principal loan amount is affordable, you will get a low EMI amount to pay.

The rate of interest is the third factor that influences the monthly installment amount. If you have an expensive rate of interest, you would surely go for a short-term home loan to finish off the loan easily.

Wrapping up

For a home loan of 20 lakhs, the EMI amount is dependent on the above-mentioned factors. If you need a home loan for salaried, make sure you meet the home loan eligibility. With a high income and a high credit score, it becomes easy to get a low home loan interest rate.