In today’s world, acquiring a loan has become a bridge most people have to cross at some point in their lives. It is the stepping stone to achieving some of life’s grand ambitions. Buying your own house, your first car, or maybe even funding your education overseas – there is a loan made to get you closer to your goals.
Now, when we start to speak about loans, we cannot avoid talking about its partner in crime – EMI. It is because loans and EMIs go hand in hand, and any discussion about one is incomplete without the other. So, what exactly is an EMI, and what factors are used to calculate it? Let’s explore these notions and also find out why a Personal Loan EMI Calculator will make financial planning easy for you.
What is an EMI?
Equated Monthly Instalments, or EMIs, as they are more commonly known, are the amount of money you are expected to pay every month. This payment adds up over time towards fulfilling the loan you have acquired.
If you are wondering how an EMI amount for your loan is decided, then it’s simple. Three factors play a part – the total loan amount, the interest rate at which the money was borrowed, and the duration of the loan that was agreed upon between you and the lender.
So, EMIs seems pretty straightforward, right? Most lenders or financial institutions will clearly mention all the required details when applying for a loan.
If you are confused before applying for a Personal Loan, using a loan EMI calculator would greatly benefit you.
If you are wondering why a calculator is more convenient, then the answer is quite simple. It is the formula for the calculation of EMI:
EMI = P x R x (1+R) ^N / [(1+R)^N-1]
Where P = Loan amount
R = Interest Rate
N = Tenure
Surely you don’t want to do the math manually whenever you want to find out the EMI for a particular loan, do you?
Loan EMI Calculator
Personal Loan EMI calculators greatly simplify the process of finding your EMI amount. These calculators are software designed to crunch these numbers and offer immediate results to your loan EMI conundrums.
Just as if you were to do the math manually, these calculators also consider the same three factors that determine your EMI amount – Loan Amount, Interest, and Tenure.
Loan EMI calculators help you tinker with each factor and help you find out the exact EMI amount you have to pay.
Beyond the EMI amount, these calculators also show you a whole array of additional details, like the loan amortization period, repayment schedules, and the total interest you will be paying through the loan tenure.
How to use the Loan EMI Calculator?
You can use the Personal Loan EMI calculator by filling in the three required basic details mentioned. Once you have filled this in, you are good to go. It is as simple as that.
The calculator will now show the EMI amount based on the interest rate and the tenure that you have selected. You can increase or decrease this EMI amount by increasing or decreasing your loan tenure. You can use the EMI calculator by simply filling in ‘How much money you want?’ and ‘How much you can pay every month?’. They will provide you with multiple plans deemed best for you based on your choices.
Don’t forget; you can use EMI calculators for different loans like home loans, study loans, car loans, and many others. They are also available 24/7 at the tip of your fingers!
Strong acumen when it comes to financial planning is an essential aspect of adult life. At a point in life, everyone will consider applying for a loan. Remember, taking a loan is not an incorrect decision at all. On the contrary, it is quite a wise choice as it liberates your financial future without bottlenecking your present.
So, don’t get overwhelmed with numbers and data. Instead, feel free to use an online Personal Loan EMI Calculator to make the ordeal of acquiring a loan less harrowing.