It doesn’t matter what type of loan you take as you need to pay an EMI for every loan. Right after you decide to apply for a loan, you need to research on the available kinds of investments in the current market. Nowadays, lenders and NFBCs in India provide all different types of loans to fulfill different buying requirements of the people.
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The Role of EMI
When you take a loan, the lender provides a specific amount of money with the intent that the amount borrowed is paid back with interest as monthly installments over a set period. These monthly installments paid by the borrower to the lender are called EMI. EMI is an acronym made for Equated Monthly Installment. Using EMI calculators is the easiest and quickest way to decide your monthly payouts and balance out your budget consistently. It includes two sections; first is the principal amount, and the second is the interest calculated and paid every single month.
The interest element of the EMI is more extensive during the starting months and slowly decreases with each payment. The precise percentage allocated towards payment of the principal depends on the interest rate. Despite this, your monthly EMI payment won’t change; the proportion of principal and interest elements will change timely.
What is a Loan EMI Calculator?
It is a device that helps you to determine the EMI. As mentioned above, an EMI calculator is used to calculate monthly loan EMI pay-outs. The borrower requires entering the variables of the loan like the principal amount, interest rate, and tenure, and then immediately getting a result that is the EMI. Determining EMI by utilising the online EMI calculator is the quickest way to know your loan EMI in seconds.
The loan EMI calculator is available 24*7 without any charges. Make sure to calculate or compare different loan EMIs for free. The best part is that you have the flexibility to determine the amount that you can quickly pay off monthly. Also, the duration for which you aim to make the payments totally rely on your financial stability.
Ways to Calculate Loan EMIs
The three prime parameters of a loan are loan amount, interest rate, and tenure. These differ in terms of different loan providers. EMI applicable to a loan varies depending upon all these three parameters. So, before selecting a particular loan, it is highly essential to get a proper understanding of these parameters and how do they connect with the loan EMI. Make sure to use a loan EMI calculator if you have taken a business loan.
Calculate Your EMI Using Mathematical Formula
The formula for an EMI calculator is universal and applied to various types of loans. The EMI payment is directly proportional to the interest rates and loan amount, which entails that with the rise in amount and interest rate, the EMI on loan also rises. If you wish to determine EMI for your business loan, then do use an EMI calculator for a business loan.
The EMI is calculated based on the formula EMI = [P x R x (1+R) ^N]/ [(1+R) ^ (N-1)]. In this formula, the variables mean:
- EMI is the equated monthly instalment
- P is the principal or the amount borrowed as a loan
- N is the tenure of repayment of the loan or the number of monthly instalments that you have to pay
- R is the rate of interest charged on the loan amount.
Moreover, while employing the calculator, you don’t have to use this formula instead enter the accurate figures in the provided section. With one click, the EMI amounts produced for the complete loan duration.
Types of EMI Calculator
EMI Calculators can be of different types relying upon the loan you select.
- Business Loan EMI Calculator: Business loans help you in growing your business in the best way possible. After you find out a business loan that suits your needs, you need to understand the concept of the EMI calculator. To pay a monthly amount, you need an EMI calculator for a business loan to find the amount you’re comfortable paying back without shaking your budget. Keep in mind that the business loan amount borrowed has to be repaid with interest within a set-out duration.
- Home Loan EMI Calculator: It is used to calculate the EMIs you pay for a home loan. Buying a home is a highly vital decision, both personally and financially. This is why applying for a home loan needs a lot of planning and research because of the loan’s long tenure and high loan principal amount. The home loan EMI calculator is designed to be user-friendly, and it assists in determining the home loan EMI immediately.
- Personal Loan EMI Calculator: Personal loans are ‘all-purpose loans.’ It means you can apply for a personal loan for any purpose such as funding your travel or medical expenses, etc. It is an unsecured loan that makes the interest rate for this loan higher and the duration shorter. The personal loan EMI calculator is the perfect device that assists you in checking your repayment abilities and reaches a loan amount that you’re comfortable to pay.
Use a commercial loan EMI calculator to find the EMI for the loan so that you do not exceed your capacity for repayment and end up stressing yourself financially.
Advantages of EMI Calculator
- The prime advantage of an EMI calculator for burrowers is that you get to know the amount you can pay for your loan each month.
- These calculators can be retrieved anywhere and anytime, and you can utilise it at any number of times as per your needs. If you’re using an online EMI calculator, then you need a device and an essential internet connection.
- Doing calculations by hand can be risky and lead to mistakes. However, doing the same calculations with an online EMI calculator is risk-free and secure.