|
0
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50L
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100L
|
150L
|
200L
%
|
5
|
7.5
|
10
|
12.5
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15
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17.5
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20
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0
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5
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10
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15
|
20
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25
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30

Total EMI

49,919

Total Interest

69,80,559

Total Payments

1,19,80,559

Break-up of Loan Amount
Created with Highcharts 4.2.2 50,00,000 69,80,559 Total Interest Principal Loan Amount
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About Corporation Bank

Corporation Bank has an illustrious history dating back to the first decade of the twentieth century. The bank was found on March 12, 1906, at Udupi, a temple town in coastal Karnataka. The bank was known as Canara Banking Corporation (Udupi) Limited. The primary objective of the entity was to encourage people to save. The bank started treading cautiously by opening its first branch in 1923 at Kundapur followed by another at Mangalore in 1926.

In 1939, the bank changed the name to Canara Banking Corporation Ltd which was further modified to Corporation Bank Ltd in 1972. The bank was nationalised on April 15, 1980, with the name Corporation Bank. It has grown in strength to have more than 2500 branches today. The bank has a robust presence in the state of Karnataka. Corporation Bank, along with Andhra Bank will now merge with Union Bank of India to become the fifth largest banking institution in India.

Corporation Bank offers all kinds of deposit and loan products, the most popular of which is the Home Loan. The bank has an attractive interest rate structure for its Home Loan customers. It offers a unique Home Loan EMI calculation chart that helps its customers understand their Home Loan EMI mechanism.

Corporation Loan Home Loan EMI Concept

Corporation Bank offers Home Loans with repayment tenures as extended as 30 years. As the housing loans involve substantially high amounts, the ideal mode of repayment is the EMI.

EMI or equated monthly instalment comprises of two variable components. The interest repayment part is a significant aspect of the Home Loan EMI in the initial stages of the loan. It can be as high as 95% of the total EMI. The EMI concept is such that it remains constant for a specific loan amount, ROI, and loan repayment tenure. The difference between the EMI and the interest component is the principal repayment part. Initially, it can be as low as 5%. As you keep repaying your EMI on time, the interest portion reduces gradually.

This mode of repayment is the most beneficial to the customer because it does not cause a financial strain on their resources. It is a gradual repayment method, but highly effective all the same.

Corporation Bank Home Loan EMI Calculator

Corporation Bank does not have a traditional EMI Calculator on its website. However, it offers the facility of an EMI chart where customers can enter the respective information in the MS Excel Sheet and get their EMI. This chart is better than the traditional EMI Calculators as it provides various other benefits.

Before we dwell into the benefits of the Corporation Bank Home Loan EMI Calculation chart, let us understand the EMI mechanism.

The Home Loan EMI calculation depends on the three variables:

  • The Home Loan amount approved by the bank
  • The applicable rate of interest
  • The loan repayment tenure

Corporation Bank Home Loan EMI Calculation Chart is simple to use in many ways. It requires the customer to enter the following data:

  • The loan amount sanctioned by Corporation Bank
  • The rate of interest per annum
  • The loan repayment period in months
  • The moratorium period if any
  • Date of disbursement of the Home Loan

On entering this information, you get the following results:

  • The EMI payable by you over the full tenure of the loan
  • The total interest payable by you
  • The breakup of the EMI into interest and principal repayment components every month (also known as the amortisation chart)

Corporation Bank Home Loan EMI Calculator - Advantages

  • It is one of the best tools to get your Home Loan EMI
  • Knowing your EMI in advance is beneficial, as it helps plan your finances better
  • This EMI calculation chart provides details of the total interest payable on the loan over the complete tenure of the loan.
  • The calculator offers the facility of an amortisation chart with details of each EMI and its breakup.
  • The EMI Calculator offers the benefit of the moratorium period. Most of the EMI Calculators do not provide this facility.

Corporation Bank Home Loan EMI Calculator - Alternatives

The Corporation Bank Home Loan EMI Calculator is a comprehensive tool. However, there are alternate methods to calculate your EMI. MyMoneyMantra.com has one such EMI Calculator on its website. This calculator works on a similar principle. Besides calculating the EMI, the calculator provides details about the total interest and amount repayable by the borrower over the entire loan tenure.

Factors That Affect the Corporation Bank Home Loan EMI Calculation

  • As the loan amount increases, so does the EMI
  • The EMI is directly proportional to the rate of interest (ROI)
  • The EMI goes down with the extension of the loan tenure

Corporation Bank Home Loan Interest Rates

Corporation Bank offers both fixed and floating rates of interest on Home Loans. The rate of interest is linked to the bank's MCLR. The effective rate of interest with effect from September 15, 2019, is in the range of 8.45% to 9%. In the case of a fixed rate of interest Home Loan, the rate of interest varies between 11.75% to 12.25%.

Corporation Bank Home Loan EMI Chart

Rate of Interest = 8.45%
Loan Amount/tenure 10 Lakhs 25 Lakhs 50 Lakhs

10 years

12,372

30,930

61,859

20 years

8,647

21,617

43,233

30 years

7,654

19,134

38,269

Rate of Interest = 8.75%
Loan Amount/tenure 10 Lakhs 25 Lakhs 50 Lakhs

10 years

12,533

31,332

62,663

20 years

8,837

22,093

44,186

30 years

7,867

19,668

39,335

Calculation of Home Loan EMI with a Moratorium Period

Corporation Bank offers Home Loan for constructing houses and purchasing flats under construction. Such Home Loans have a maximum moratorium period of 18 months. The regular EMI commences after the disbursement of the final instalment. Usually, many banks insist on the borrower paying the pre-EMI interest every month. However, Corporation Bank allows the capitalisation of the pre-EMI interest. Thus, the EMI varies. This table will make it clear.

Rate of interest = 8.45% for loan amount 10 Lakhs
Loan tenure With moratorium of The effective number of instalments Regular EMI without a moratorium EMI after considering a moratorium

10 years

18 months

103

12,372

15,418

20 years

18 months

223

8,647

10,032

30 years

18 months

343

7,654

8,719

Corporation Bank Home Loan EMI - Points to Note

  • As the Home Loan increases from 10 Lakhs to 50 Lakhs, the EMI rises from 12,533 to 62,663 (@ 8.75% for 10 years).
  • When the tenure increases from 10 years to 30 years, the EMI reduces from 12,372 to 7,654 (@ 8.45% for 10 Lakhs).
  • An increase in the interest rate from 8.45% to 8.75% sees the EMI increase from 21,617 to 22,093 (loan amount 25 Lakhs for 20 years).
  • When you have a moratorium of 18 months, the effective number of instalments reduce from 120 to 103.
  • The EMI increases from 12,372 to 15,418 ( 10 Lakhs @ 8.45% for 10 years)

Corporation Bank Home Loan EMI Calculator - Factors That Affect the EMI

ROI fluctuation

Corporation Bank offers Home Loans on a floating rate of interest. The rate of interest on Home Loans links to the MCLR of the bank. The bank announces its MCLR every month but resets the MCLR on the Home Loans at six-month intervals. Therefore, every six months, the rate of interest changes. Whenever there is a change in the effective interest rate, there should be a change in the EMI, as well.

Moratorium interest

Loans involving moratorium are different from the Home Loans where the EMI starts immediately after disbursement. The regular EMI in the moratorium-backed Home Loans does not commence until the final payment. It could extend up to 18 months. Corporation Bank capitalises the interest and adds it to the principal loan amount. Thus, the EMI increases considerably.

PMAY Subsidy

Corporation Bank is a significant lender in PMAY. The EMI calculation in the case of PMAY accounts is different from the regular Home Loan accounts. It is because of the element of upfront interest subsidy. Every PMAY account comes with an interest subsidy. The Government grant is credited upfront to the loan account, thereby reducing the principal loan amount. Thus, it affects the EMI.

Prepayment

Corporation Bank does not charge any penal interest on prepayment of Home Loans. Usually, borrowers do not request the bank to reduce their EMI after making the prepayment. However, they can do so to get the benefit of a reduced EMI for the residual portion of the contracted loan tenure.

Corporation Bank Home Loan EMI Calculator - FAQs

What makes the Corporation Bank Home Loan EMI Calculator different from the others?

The Corporation Bank Home Loan EMI Calculator is in the form of an MS Excel table. It gives a wealth of information ranging from your EMI to the total interest payable on the loan account. It also provides a month-wise breakup of the EMI repayment. This calculator proves useful when calculating Home Loan EMI in cases involving moratorium.

What is the pre-EMI concept?

Any interest charged by the bank on the Home Loan before the commencement of the regular EMI is known as pre-EMI interest. Such a situation arises in the case of Home Loans sanctioned for construction purposes. The maximum moratorium on such loans is 18 months.

How do the banks treat pre-EMI interest?

Many banks insist that the borrowers service the pre-EMI interest every month. In a way, it is beneficial for the borrower, as well. The amount payable each month as pre-EMI interest would be less than the regular EMI. Secondly, it also helps in reducing the regular EMI amount if you service the pre-EMI interest on time.

How does Corporation Bank treat the pre-EMI interest?

Corporation Bank offers facilities whereby they capitalise the pre-EMI interest and add it to the principal amount. Thus the borrower need not pay the pre-EMI interest every month during the moratorium period. Such an arrangement can suit the borrower, especially if they are on tight budgets.

What is the concept of the amortisation schedule?

The amortisation chart displays the interest and principal repayment breakup every month for the entire tenure of the loan. It helps the borrower to understand the concept of the Home Loan EMI.

Can I use the Home Loan EMI Calculator to estimate the EMI of other loans?

Yes, one can use the Home Loan EMI Calculator to estimate the EMI of other loans. The EMI concept is the same for all kinds of loans.

Why is the EMI the best mode of repayment for a Home Loan?

Usually, there can be two types of loan repayment. One is the Equated Instalment mode, and the other is the Equated Monthly Instalment method. Many borrowers confuse between the two modes and treat it as the same. However, the concepts are different.

In the Equated Instalment mode, the bank divides the loan amount by the number of instalments and fixes the principal repayment component. This component remains unchanged throughout the repayment schedule. Apart from this amount, the borrower has to repay the interest charged to the account every month. Hence, it can result in a substantial liability, especially if it is a Home Loan.

The Equated Monthly Instalment is a constant figure for a specific loan amount, ROI, and loan tenure. The interest and principal component vary accordingly. In the initial stages of the housing loan, the interest portion will be substantially higher than the principal repayment portion.

Thus, EMI is the best repayment option for long-term loans, such as Home Loans. It distributes the liability evenly throughout the entire tenure of the loan.

Can a default in the repayment affect the EMI?

Usually, the customer has to clear the defaulted instalment with penal interest and other charges. If you do so, there is no effect on the EMI. However, if you do not reimburse the penal interest and additional fees, it adds up to the principal amount. You end up paying interest on this portion, as well. The liability adds up, thereby necessitating a change in the EMI.

How does Corporation Bank treat the EMI in the event of interest rate fluctuations?

Typically, the EMI should change whenever there is a change in the interest rate. However, frequent changes in the EMI can affect the budget of the borrower. Hence, Corporation Bank prefers to maintain the EMI as constant and vary the loan tenure. If the rates go up, they extend the mandate. At the same time, a reduction in the rate of interest causes the tenure to reduce, as well.

Does the Corporation Bank Home Loan EMI Calculator help you to determine your affordability?

The EMI Calculator does not have a direct mechanism to determine your affordability. You can try out the trial and error method to arrive at the maximum EMI that you can afford to pay. Accordingly, you can arrive at the maximum loan amount you can afford to avail.