The Equated Monthly Instalment (EMI) is a fixed payment made by the borrower on a monthly basis to the lender to repay the principal along with interest over a specified period.
Here, the EMI calculator helps borrowers to plan a monthly budget as per their monthly repayment capacity. They can also compare various loan options to find the best one for their needs.
Even before you can take a loan, you can calculate the EMI with the help of an EMI calculator tool.
What is an EMI Calculator?
An online EMI calculator is an effective and useful financial tool that assists in calculating the EMIs required for repayment of the loan amount borrowed. To employ this calculator, you must enter the loan amount, period, and interest rate.
This will give you the accurate EMIs to be paid until the loan is fully settled. Here is the EMI formula for your convenience:
EMI = [P x R x (1+R) ^N]/[(1+R) ^N-1]
P – Principal Amount of Loan
R – Rate of Interest
N – Monthly Instalments
What are the Benefits of EMI Calculators?
The following are the benefits of the EMI calculator:
- Less Time Consuming
- Access it Anytime, Anywhere
- Allows You to Plan Your Monthly Budget
- Simplifies Calculations
- Compares Other Loans
1. Less Time Consuming
Avoid relying on tedious manual calculations to determine the interest rates on your loan amount. An EMI calculator is a much better alternative, as it works efficiently and instantly provides results.
2. Access it Anytime, Anywhere
The convenience of an EMI calculator is unparalleled. It can be accessed at any place and time, allowing you to use it as often as you need. Simply access the internet at home and use the EMI calculator to make calculating your EMIs easier.
3. Allows You to Plan Your Monthly Budget
With the precise calculation of the repayment amount, you will understand how it will influence your monthly finances. Once you know how much a loan will cost you and how badly the dent will fall on your wallet, you can adjust your expenses accordingly.
4. Simplifies Calculations
Manual calculations are prone to errors. You cannot risk making mistakes while calculating your loan EMIs as that will disrupt the budget you set for the month. Here is when an EMI calculator comes in handy!
It can perform all sorts of complicated calculations within seconds. Moreover, there are no human interventions, so you can always trust the machine to give accurate results.
6. Compares other Loans
When applying for a loan, it is essential to compare the loan offers from various banks. Utilising a loan EMI calculator can be beneficial in this regard, as it provides a comprehensive overview of the total cost of the loan and respective EMIs.
This will allow you to select the best-fitting loan option for your needs. It is important to note that loan
interest rates may vary between lenders, and even a slight difference of 0.02% can drastically affect the EMI amount.
What are the Types of EMI Calculators?
There are various types of EMI calculators that we come across in the financial market – these are as follows…
- Personal Loan EMI Calculator
- Education Loan EMI Calculator
- Car Loan EMI Calculator
1. Personal Loan EMI Calculator
Personal loans have become increasingly popular in recent times. These multipurpose loans suffice your minor needs like planning vacation expenses or wedding ones.
The benefit of using a personal loan EMI calculator is that it can estimate the details of your personal loan, such as the monthly payments to the bank.
2. Education Loan EMI Calculator
Year after year, the cost of education appears to be continually rising, and if you are eyeing higher education for your child, you may require an education loan.
Generally, such loans are provided with a deferment period, allowing you to commence repayment only upon course completion. The calculator tool can assist in calculating what the total loan will cost.
Check also: Home loan criteria & documents
3. Car Loan EMI Calculator
Ensure financial comfort when purchasing your dream car by taking the time to budget appropriately. Utilise the car loan EMI calculator to accurately determine the cost of an EMI if that is the route you are considering.
Doing this ahead of time can help prevent any unexpected financial strain. Choose an EMI Calculator Appropriate for the Loan Using an online EMI calculator tailored to a specific loan can be more beneficial and practical.
The parameters of each loan may be similar, yet there are times when a loan-specific calculator would be necessary. This would help make the process smoother, and one can use a different calculator for each type of loan.
Choose an EMI Calculator Appropriate for the Loan
Using an online EMI calculator tailored to a specific loan can be more beneficial and practical. The parameters of each loan may be similar, yet there are times when a loan-specific calculator would be necessary. This would help make the process smoother, and one can use a different calculator for each type of loan.
Author Bio:
Tanvi Kaushik specializes in Content Marketing and works with the Digital Team at KreditBee – India’s fastest personal loan platform where self-employed and salaried professionals can easily avail of personal loans in just a few minutes when in need of quick funds. Tanvi writes to-the-point articles on personal finance and budgeting which are truly appreciated by her readers. She is committed to making money matters easy to understand even for the layman. Her commitment to her work doesn’t stop her from pursuing her hobbies of hiking, trekking and going on adventurous trips.
