Off late I have been involved in home loans a lot. Just I wanted to understand the mystery behind the calculation of EMI, the prepayment and the balance computation. Since my home loan is with the Corporation Bank, and it being a PSU, I cannot expect the account statement to be shown online. By the way do any of you see such a facility with any private banks?
I took home loan of type fixed interest rate and monthly resting option. The following steps should help you calculate the monthly balance of your home loan
Step 1: Calculate EMI. I used the formula given by Ranjit.
Step 2: For the first month the balance can be calculated as
Balance Principal = Principal + (ROI * Principal) - EMI
Step 3: The balance principal becomes the principal for the next month. Repeat Step 2
Note: If you have done prepayment on a particular month, deduct the amount from the balance principal to get the actual balance.
I wrote a small java program to do the calculation for me. This can be extended for daily resting option and also for the floating rate of interest.
P.S: Apart from such minor nuances, I felt the relationship with the bank much better. There has been no hidden charges and the default options in the home loans are better tweaked to benefit the customers. I felt that with private banks unless the customer is alert, they ought shell out more.