The primary thing you need to know is that an EMI stands for “Equated Monthly Installment,” which, being a loan applicant, you need to repay. The loan applicant can approach a bank, different financial institutes, and online loan lenders in order to claim a handsome loan amount. Usually, the loan repayment in the form of EMIs is made on a monthly basis until your loan tenure ends. Moreover, the EMIs are the total of the principal or loan amount.
When it comes to the interest rate, which is usually 12%, is divided by your tenure or duration. In a nutshell, your EMI amount depends upon your claimed Loan amount and on the tenure or duration. As per the information, your interest starts gradually reducing as time passes and the loan repayment is made. But initially, the interest rate on your EMIs will be slightly higher.
Furthermore, an online EMI calculator is available for free, less time-consuming, and easy to access via the calculatoremi.com website. This EMI calculator works as an assistant for you to ease calculating EMIs, Interest rates, and other things. Without digging deep, let’s understand more about the EMI calculator and its usage by sticking to the following information.
Formula to Calculate EMI
The formula of an EMI is quite simple, which is [P x R x (1+R) ^N]/ [(1+R) ^N-1]. You can easily find this EMI formula in an inbuilt form while accessing it. Moreover, keep the following terms in mind before applying the formula. And these are:
E is EMI
P is Principal Loan Amount.
R stands for the rate of interest per month.
In case you are calculating the interest rate is an annual basis. Then, the interest rate will come out as – interest / (12 x 100)].
And last, N is the loan tenure or duration is a time period to make repayment of your claimed loan amount in months.
How Does EMI Calculation Help in Managing?
Using an EMI calculator via calculatoremi.com helps you make an idea regarding the exact loan amount you need to pay to the borrowed one in the form of EMIs. Besides calculating EMIs, an EMI calculator can be used for planning your budget and managing finances. Moreover, the users of an EMI calculator also learn about their loan amount and their loan tenure period till which they have to repay the loan amount. Hence, an EMI calculator plays a vital role in calculating your eligibility and planning or managing your budget as well.
What is an EMI Calculator?
When describing an “EMI Calculator” is an online tool that performs the same as another calculator when it comes to calculation only. But sometimes, we require more than calculation in a calculator, specifically if we are claiming a loan. And these are Personal Loan, Home Loan, Car Loan, Education Loan, and other bulky loans. Thus, by using an EMI calculator, you can calculate the monthly amount that you need to pay in the form of an EMI. Moreover, the EMI loan calculator can be easily found on the websites of online money lenders, banks, and other financial institutes.
Apart from calculating EMIs, the user can also find out about Interest Rates, Credit Ratings, Loan comparisons, and other features. Regarding its functionality, begin by entering the loan amount that you want to claim. Next, you need to select your preferred loan tenor or duration. Last, put the loan interest rate the same as given on the website, and that’s how you are done.
Key Elements that Affect your Loan EMI
Three major key elements affect your Loan EMI Calculator the most. So, if you are new to it, then you must know about them by following the downward points:
- Principal Amount
The principal amount, or you can say loan amount that you claimed from lenders such as banks or financial institutes. If you don’t know, your monthly EMI is charged as per your applied loan amount.
- Rate of interest
The interest rate is a proportion on the basis of which the lender offers you the loan amount. Suppose the interest rate is 12%. That means you must pay your monthly EMI and a 12% interest rate.
- Tenure Period
The loan tenure or duration is a period within which you must repay your applied loan amount. Moreover, the shorter your loan tenure, the more you have to pay the EMI amount. So it’s better to prefer a longer tenure to repay the loan amount as it reduces the EMI amount, which sounds affordable.
Read More Also :- Plan Your Finances with Home Loan EMI Calculator