The cost of living in the 21st century is skyrocketing every day. Hence loans have become a significant part of livelihood. From buying property to bringing a new car home, you need to acquire loans in order to meet your financial requirements. We reach out to banks and other financial institutions that help bridge the gap between our needs and the availability of finances. There’s no doubt in asserting that loans make it easier to meet our financial goals that are hard to achieve.
There are plenty of terms and implications that you need to understand before applying for any loan. EMI or equated monthly instalment is one such significant term that you would often hear while applying for a loan. It is basically a stipulated amount that you will be paying on a monthly basis to repay the loan. It is essential to use an EMI calculator whenever you want to calculate the repayment amount. It helps in finding the correct sum with the added interest that you need to pay to the bank or financial institution.
What is a Loan EMI Calculator?
EMI amount comprises of the principal amount of the loan with the accrued interest. It is almost impossible to calculate the extensive EMI amount without any mistakes. An EMI calculator makes the work easier for you by automating the entire process of the calculation. It is used to calculate your monthly loan EMI payouts. You need to enter the variables of your loan, including principal amount, interest rate, and tenure, and the calculator will display your EMI payouts. It is advised to use an EMI calculator before applying for the loan in order to get an idea of the EMI payouts.
Why You Use An EMI Calculator Before Applying For Loan?
- It works as a self-help tool to calculate your equated monthly instalment for the loan without any hassle.
- An EMI calculator will also help you in calculating your home loan eligibility and gives information regarding finance availability.
- Several financial institutions and banks provide their dedicated EMI calculators on their websites to make it further easier for the customers to check EMI payouts.
- When you calculate your EMI payouts using a calculator, your inputs are tracked in the loan agreement.
- It also gives you the details regarding the Amortization schedule, which means it gives a clear picture of how your EMIs will be divided between principal amount and interest and the remaining balance of the home loan.
- Using an EMI calculator will help you determine which loan package would be ideal for you.
Whenever you think about loans, EMIs are the first thing that registers in our minds. It is an equated monthly instalment amount that the borrowers have to pay every month to repay the loan. It consists of the principal amount and the accrued interest charged by the bank/ financial institution.
Using an EMI calculator is a smart move that ascertains the actual EMI payouts for your loan. Whenever you think of taking a loan, make sure to use an EMI calculator to get a fair idea of the financial obligations that will fall on your shoulder after the loan.