Here is How You can Calculate Your New PNB Home Loan Interest Rate and EMI
You’ve probably read about the repo rate hike by 50 basis points declared by the Reserve Bank of India (RBI) on August 5, 2022. Many PNB Housing reviews on the Internet point to the fact that despite this hike, PNB Housing offers home loans at low-interest rates starting from 7.99%* per annum for salaried & self-employed individuals. In light of this new change, it’s crucial to know your EMIs if you plan to apply for a PNB Housing Home Loan.
Factors that affect EMIs
EMIs, or Equated Monthly Installments, are the monthly payments you are expected to make to repay your PNB Housing Loan. Your EMI amount is calculated based on several factors, such as the principal loan amount, tenure, and interest rate.
Here are a few things to keep in mind:
- The higher the principal amount, the higher your EMIs will be
- Similarly, a longer tenure results in lower EMIs, while a shorter tenure results in higher EMIs
- The most important factor that affects your EMI is the interest rate. A higher interest rate will result in higher EMIs, while a lower interest rate will result in lower EMIs.
How to Calculate Home Loan EMI?
The following formula will help in EMI calculation.
The formula is:-
P x R x (1+R)^N / [(1+R)^N-1] where-
- P = Principal amount
- N = Loan tenure (In months)
- R = Monthly rate of interest
*The interest rate (R) on the loan amount is calculated monthly.
R = Annual Rate of interest/12/100
If the rate of interest is 7.99% p.a. then r = 7.99/12/100 = 0.006
For example, for a PNB Home Loan of INR 5 lakh for a tenure of 10 years at an interest rate of 7.99%; then the EMI will be calculated as:
- EMI= Rs 5,00,000 x 0.006 x (1 + 0.006)240 / ((1 + 0.006)240 – 1) = Rs. 6,064
- Total amount payable= 6,064 x 120 = Rs 7,27,649
- Interest Amount= Total amount payable – Principal Amount = 7,27,649– 5,00,000= Rs. 2,27,649
The EMI mentioned above is just an example, and it may vary depending on your down payment, tenure, and other factors. You can use PNB Housing’s EMI calculator to check your EMI based on your tenure and loan amount. Before applying, compare tenure and loan amount combinations to see what fits your budget better.
Documents Required for PNB Housing loan
- Home Loan application
- Age proof
- Residence proof
- Education qualifications
- Income proof
- Property documents like the title, the approved plan, etc.
- Anyone above 21 can apply for a home loan. The applicant’s age should not exceed 70 years at maturity.
- The minimum CIBIL score required is 611
- The minimum monthly salary should be INR 15,000+
- Salaried and Self-employed individuals should have work experience of more than three years
Doe’s PNB Housing Have Different Housing Loan Schemes?
Yes, they do have different schemes related to housing loans:
- Home Purchase Loan
- Home Improvement Loan
- Home Extension Loan
- Home Construction Loan
- Residential Plot Loan
- Loan for NRIs
- Unnati Home Loans
- PNB Housing PMAY Scheme (extended till 31st December 2022)
Borrowers can go to the PNB Housing website and use its EMI calculator to see if a rate hike has affected their PNB home loan EMIs. Read the reviews and testimonials to gather information on how easy the process is with a lending institution like PNB Housing.