Getting a personal loan, house loan or car loan has become quite simple and easy these days. Without the need for placing collateral against the loan, a personal loan is designed to serve multiple functions depending on what the borrower is taking it for. Likewise, a car loan is specifically meant for the purchase of a car and home loan for that of a house. As is the case with loans, they come with a payment structure in which the principal and interest amount have to be paid back. With the scheme of Equated Monthly Instalments or EMI, the borrower gets the advantage of gradually paying back a small portion of the loan money on a monthly payment basis.
However, it is important to know beforehand how much one has to pay for the loan taken in an allotted period. To this end, an EMI online calculator can come of great help.
What Is EMI Online Calculator
An EMI online calculator is an online tool specially designed for the computation of loan amount a borrower has to pay along with the interest incurred on the same. To calculate EMI, one needs to add given information into the calculator: the loan amount, the tenure of the payment and the rate of interest on the loan amount. The EMI online calculator will automatically show the results of the monthly payment the borrower will have to make to clear his debt.
There are basically three types of EMI calculator:
- Home Loan Calculator: helps in determining the EMI for a house loan
- Personal loan calculator: helps in determining the loan EMI for miscellaneous purposes.
- Car Loan Calculator: helps in determining the EMI for a car loan.
Benefits Of Financial Planning Through EMI Calculator
EMI online calculator makes financial planning easy by providing a number of benefits that help in the overall decision making of the loan as well in assisting with the complex maths. Here are some of the ways in which EMI online calculator can be of assistance in financial planning:
1. Easy And Quick
EMI online calculator is relatively easy to use with no complexities whatsoever. It generates the result as soon as the requisite information is provided. Before the availability of an online EMI calculator, one had to manually compute the EMIs. This would make the process tedious and prone to mistakes. In the online EMI calculator, the formula of EMI is given and the user has nothing to do but enter details. Since this tool is available for free, a user can use it as many times and from anywhere he wants. An effective and quick calculation will make the process of financial decision making just as quick and effective. Because without an EMI online calculator, it is easy to lose sight of how much one has to borrow and based on that how much would have to pay. Be it the loan amount, the interest rate, or the tenure of payment a variation in any can change the EMI. Therefore, it is important to use the EMI online calculator prior to getting a particular loan.
Manually calculating EMIs is not as quick and convenient as it is to do with an EMI online calculator.
2. Determination Of Payment Capacity
With the help of an EMI online calculator, it is easy to determine what payment structure would be most suitable to the borrower. Based on the loan amount the borrower has opted, he will get the firm idea about what the EMI amount would be. However, if the EMI amount seems to be more than his payment capacity, he can bring it down by increasing the tenure of payment. This will eventually result in lower EMI but a higher interest amount. On the other hand, if an EMI amount seems to be less than one’s payment capacity it can be adjusted by reducing the tenure. This would increase the EMI amount and will reduce the total interest to be paid on the loan.
3. Helps In Determining the Lender
As the EMI online calculator also uses an interest rate in its calculation process, it is evident that if the interest rate is lower the EMI payment amount will also be lower. So the EMI calculator can help the borrower in choosing the lender from whom he will borrow on the basis of the rate of interest. It is easy to go out of track and get oneself a higher interest rate without an EMI calculator.
4. Disciplined And Organised Repayment
A beforehand knowledge of what the EMI would help the borrower in managing his finances accordingly. He will know how much he has to pay each month and therefore can arrange his expenses on the basis of that. This way he will neither lose focus of the repayment schedule nor will add any further financial burden on himself.
Thus, having learned about the EMI online calculator a borrower can easily bring himself to make the appropriate decisions and effective planning measures about his financial goals. Now not only getting a loan is easy but also decisions regarding how the EMI has to be paid and which lender to select has also become relatively convenient with the help of an EMI calculator.