Thursday, February 22, 2007

Home Loan : Calculating the Balance Sheet yourself

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.

1 comment:

Abbas said...

I don't want to put the nice bad words that I would give for the KPN. Sometimes I feel may this travels is operated by some goons? I frequently travel to PALANI. If one has to reach anywhere in between Coimbatore to Dindigul via Pollachi, Udumalpet, Palani and Oodanchatram, well they are all left out with only one choice KPN!! No direct train, no other direct service government service or private service.

Points that I would note:

Exactly in between 2 to 3 am the bus stops at salem petrol pump to fuel the bus, at the same time some guys jump to the top of the bus to load and unload parcels. Sometimes I feel this service is for public or for parcel? Then on my sleep is lost, each station the same routine happens.

Then goes and parks the bus in the side lane of dindigul bus stand, which is the urinal lane. Even I'm sleeping, suddenly feel the catastrophic bad smell and jump out of the bus until it moves!

They lack the minimum common sense in operating a service. They have to understand that a parcel service cant be run from a 10X10 size rooms. Keeping all the parcels on the road blocking whole traffic. And the pity is how some ones valuable parcel is left on the road until its loaded in the bus.

They have no value for their customer, for their life (at the mercy of driver, several times watched the driver standing up and driving while overtaking when there are speeding vehicles opposite side) and for the customers properties!

These days I'm avoiding KPN as much as possible, by going by train.