What Is an Online Loan EMI Calculator?
An online loan EMI calculator gives you the flexibility to calculate your equated monthly installments (EMIs) as per your convenience. Your EMI is calculated as per your loan amount, the tenure over which you wish to repay your loan, and the interest rates being offered by different banks for different kinds of loans, whether it is home loan, personal loan, education loan, etc.
For instance, the interest rate that a particular bank charges on a particular type and amount of loan may be very different from that being offered by some other bank. That is why an online loan EMI calculator uses sliders for three aspects. They are loan amount, rate of interest and tenure over which you want to set your loan repayment schedule. So, you can shift and shuffle the amounts, values and rates on the slider to arrive at the exact details. Details such as amount of loan you wish to take, the tenure over which you wish to repay your loan, and the interest rate you will have to pay accordingly.
This will give you a very customized loan. As a matter of fact, these online loan EMI calculators also let you calculate what happens when you wish to pre-pay your loan, or pay extra EMIs periodically in order to finish your loan burden as fast as you possibly can. For this purpose, there are even special pre-payment EMI calculator and even interest calculators online. Most banks allow for such customization because of the fierce cut-throat competition from other banks and financial institutions.
How to Use A Loan EMI Calculator?
To get your EMI, your will have to input the following details into the loan EMI calculator:
- Loan amount: These online calculators allow for an input of amounts between Rs 50,000 and Rs one crore.
- The tenure: The calculators allow for an input of a loan tenure from one year and 30 years.
- Interest rate:In these online loan EMI calculators you can feed any interest rate ranging from 1% to 50%.
Once you input these values in the calculator, the calculator will show you the exact amount of EMI you will have to pay. If you feel the EMI is too big for you to afford, you can change the values on the sliders to lower your EMI. In this case, you will probably end up repaying your loan over a longer duration. On the other hand, if you feel you can afford to pay a larger EMI, you can accordingly shift the values on the three sliders to arrive at a larger EMI. In this case, you will be able to complete the repayment of your loan in a shorter duration, and also you will end up paying lesser interest on your loan. Besides, these loan EMI calculators will also show you in the results the break-up of each EMI that is how much portion of the EMI is going towards interest payment on your loan and how much towards the principal amount of your loan.
Advantage of Using A Loan EMI Calculator Online
The advantage of using a loan EMI calculator online, in case you have taken a loan at a flexible rate of interest as against a fixed rate, is that you can check out your EMI at any point during the course of your loan repayment period. For instance, if you have taken a home loan and the industry rate of interest goes down or up, and your bank also changes the interest rate accordingly, you can calculate what impact it will have on your EMI by using the home loan EMI calculator. So, if you wish to make changes in such a scenario to take advantage of it, you can do so by refinancing your loan from another bank if your bank does not make the desired changes on its own.
Another advantage that some online loan EMI calculators, particularly the home loan EMI calculator, offer is to check your eligibility for the loan you wish to apply for. They have a button named ‘get quotes’ and if you click on it, you will be redirected to a page where you may have to answer some basic questions regarding your financial situation, or whether you are already in the process of repaying some other loan. This is done to figure out your repaying capacity, and whether you will be eligible to take another loan. You would do well to use this feature, as it will keep you safe from paying too much of your income towards EMI, which will leave you with insufficient disposable income to meet your domestic and personal expenses.
Once you are done with feeding the required details on the page where you have been redirected, the online loan EMI and interest calculator will also display the best loans available not only as per your requirement, but also as per your repayment capacity.
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