A loan is a financial agreement between a lender and a borrower where the lender lends a sum of money for a specified period of time which needs to be paid back by the borrower along with the interest amount (rate of interest is fixed in terms and conditions of the contract). This borrowed amount when returned within the stipulated period of time in the form of monthly pay-outs to balance out the total budget of the borrowings is called an EMI – Equated Monthly Instalment. Loans are taken for various purposes – personal or professional use and need to be returned at some point in time with the advantage of extra money in the form of interest which is owned and taken by the lender.
The process which defines the conversion of the loan amount plus interest into easy monthly instalments which can be conveniently paid by the borrower to the lender is called an EMI Loan Calculator.
The main parameters required to calculate an EMI amount are the amount taken as loan, the rate of interest, and the overall tenure for which the loan is used. There are three ways to calculate EMIs:
The main formula used – EMI = [P x R x (1+R)^N]/[(1+R)^ (N-1)],
Variables stand for:
The same formula is applied by the online EMI Calculator in seconds.
With an online EMI calculator, the borrower can easily customise his loan repayment requirement, duration of repayment, and monthly budget and accordingly pay a monthly depending on his income and maintain financial stability. Using the same standard formula, it is built in to provide many benefits to consumers like timesaving, convenience, comparison of different loan types, tenures, vendors, and much more: This helps in calculating EMIs for various kinds of Loans like:
Depending on the type and category of loan, one has applied for, EMI Calculator can be of 5 different types:
1. Home Loan EMI Calculator:
Home loans are based on the cost of property and the repayment capacity of the borrower. These loans are long term loans with a high principal amount which can be repaid up to 30 years. The personal requirements and eligibility criteria are important to heed to before deciding on the home loan. All one has to do is to enter the loan amount, interest rate, and the tenure in the EMI Calculator to ascertain the home loan EMI.
2. Personal Loan EMI Calculator:
These are all purpose loans which can be taken for personal and professional reasons like a wedding, shopping, construction, renovation, buying a new product, etc. This is an unsecured loan, so it comes with a high rate of interest and a shorter tenure to pay the amount. One needs to enter all the relevant parameters and use the EMI calculator to find the best vendor who will give a personal loan at the most affordable EMI.
3. Car Loan EMI Calculator:
An individual can buy his dream car – new or second hand through this loan. While using the EMI Calculator one must ensure that the amount will be low or high in accordance with the kind of vehicle chosen, the maximum tenure can be 5 years with a condition that if the loan is not repaid on time, the lender has the leverage to take away the vehicle and auction it to recover the balance. So, using the EMI Calculator, one must calculate the amount to be paid feasibly to avoid issues.
4. Education Loan EMI Calculator:
The cost of education is climbing. It becomes imperative to take an education loan to fulfil the academic demands of children. This loan is taken before the admission of the child in the required university after which a moratorium of minimum 6 months is provided. There is no need to start with the repayment immediately after the loan is taken, as the choice is given to start with EMIs after completion of the course or after the child gets a job. If the repayment immediately starts even during the moratorium period it comes with benefits.
5. LAP – Loan against Property EMI Calculator:
There could be a minimum and maximum restriction according to these kinds of loans but the Property against which the loan has been availed is treated as a collateral. In case the borrower is unable to pay his EMIs and dues on time, the lender has the right to seize the collateral pledged by the borrower and can compensate the pending amount.
Step.1 – Visit to the Portal and select the EMI calculator page under the calculator tab
Step.2 – Select the type of loan that the individual is looking for, example home loan, personal loan, car loan, etc.
Step.3 – Select the appropriate EMI calculator tab
Step.4 – Now the individual needs to enter the mandatory parameters – amount of loan, principal, interest rate, and tenure of the loan.
Step.5 – As soon as the three variables are entered, the EMI Calculator displays the payable EMI amount
Step.6 – Now the applicant can try the same using different combinations to reach at the best-fit EMI
Step.7 – Post that, the applicant can also check his loan eligibility and get the best loan quotes depending on his eligibility and financial requirements and he can also apply for an online loan.