The loan is a financial instrument often obtained by the individual or an entity to meet their financial needs. In this, the lender lends some amount with the intent that the borrower will pay back the amount in a fixed instalment, within a fixed period. The monthly instalment is called as EMI.
The acronym ‘EMI’ stands for equated monthly instalments that the borrower pays upon obtaining the loan. It consists of the principal amount as well as the interest component on the loan.
When a borrower receives a loan from financial institute, he needs to pay back the amount with interest. The amount of the loan is divided into EMIs that can be calculated using Online EMI Calculator.
What is EMI calculator?
EMI calculator is a financial tool used to calculate monthly instalment which is to be paid by the borrower. It is the easiest way to determine the total monthly payout.
To use the calculator you only need to share the loan information such as the principal amount, the interest rate, the loan tenure and the EMI is readily calculated at a click.
Using the EMI calculator, you can easily calculate the loan repayment amount without any help from the financial executive. As, bank allows the applicant to decide the instalment amount as per their repayment capacity; using this calculator you can confidently determine the amount of instalment, as per your repayment ability and monthly income.
How does EMI calculator work?
EMI calculators are online tools which can help in calculating the loan EMIs. Anyone can open these calculators online as most banks and financial institution share free tools for public access . It asks users to enter information, with which it yields final results in a fraction of seconds.
The final result of the Personal Loan EMI Calculator is reached at, after using formula by the calculators. A user would typically need to enter the following information in the EMI calculator:
- The loan amount – This is the actual amount which has been borrowed.
- Tenure of the loan – This is the total period in which the amount of loan is to be repaid.
- Interest rate – This is the interest which the bank charge on the amount lent to the borrower.
You can easily calculate EMI with this calculator. There are various benefits of EMI calculator, and this may include the following:
- It offers convenience. It lets you calculate your EMI online without any requirement of pen and paper. Wherever you are, you can know the actual cost of EMI you will be required to pay for your loan with this calculator. You are not required to visit the bank or the financial institution for knowing your instalment amount. You can figure it out online conveniently.
2) It guarantees accurate results. EMI calculation for a Home Loan and Personal Loan can get tough at times because it has complex calculations involved. The calculations which are a bit difficult with the pen become straightforward with a calculator. Personal Loan EMI Calculator can help find out the final amount of EMI to be paid for a Personal Loan without any risk of making mistakes. Just by entering the right rate, interest, loan tenure and loan amount you can get a hundred percent accurate result for your EMI.
3) It is easy to understand. The result derived by such calculators is easy to understand. You can get the exact amount of instalment for your loan. You need not perform any further calculations. Besides the exact amount of EMI, it also provides other information like the time remaining, principal outstanding amount, etc. in a clear graphical format.
4) It aids in the financial planning process. When you can judge the exact amount EMI you will have to pay for the loan, you can take significant financial decision of loan. Online EMI Calculator lets you find the exact amount of EMI and duration. With this, you can plan your loan, its duration, the amount of loan and the instalment. It can thus eases the entire process of financial planning.
5) It is fast. Calculating loan instalment amount manually using the complex calculations require time. Applying the same formula again and again for calculating and comparing different loans of banks can be time consuming and boring process, but with easy online calculators, the entire exercise turns fast
6) Use customised calculation option. There are different calculators for different types of loans. Home Loan EMI Calculator will have its own set predefined instruction with which it will calculate the final amount of loan. This makes it easy to find specific instalment amount for a specific loan. With such calculators, you extract exact information about loan repayment amount for any particular loan.
7) Compare and find the best loan. You can compare various loan offers of different banks in seconds. The calculator can help you decide which one is the best offer from the available list. Different banks may provide a different rate of interest and with online calculators it is easy to find out the actual amount to be repaid for a loan for the specific bank.
EMI calculator can help the borrower find out the exact cost of EMI to be paid for any type of loan each month so that they can plan it and do not lag behind in loan repayment capability.