Most of us have borrowed loan of some or the other kind and we are all aware of the term EMI. EMI stands for equated monthly installment. EMI is the amount that you need to pay to your on a monthly basis on a pre-specified due date. EMI consists of the principal amount borrowed by the customer as well as the interest component charged towards it. The proportion of principal and interest charged in the EMI changes with time. The bank tries to recover most of interest amount in the beginning of the loan tenure, therefore the interest component in the initial few EMIs would be higher and the interest component in an EMI Calculator towards the end of the loan tenure would be relatively low. Borrowing loan and paying through EMI is way better than making lump sum payments owing to the fact that it is more affordable, flexible and comfortable to pay in smaller EMIs compared to a lump sum payment.
Formula for Calculating an EMI
EMI = P.r.(1+r)^n/((1+r)^n-1)
➤ P stands for Principal Amount borrowed in Rupees
➤ r stands for rate of interest calculated on a monthly basis.
r = Rate of interest annually/12/100. For example:If the rate of interest is 10.5% per annum, then r = 10.5/12/100=0.00875
➤ n stands for loan tenure in number of months.
If you know how to calculate your EMI you will be able to plan your EMI before borrowing the loan. If you want to borrow any loan and pay a lower amount towards your EMI then you will have to bear high rate of interest towards your loan, and also have to keep paying the EMI for a longer tenure. Whereas, if you borrow a loan and pay higher amount towards your EMI then you will be able to get away with higher rate of interest charged towards the loan borrowed and also the loan tenure would be shorter. Being able to know your EMI before you actually borrow the loan can help you plan your budget better in a long run and manage your finances better. If you think that calculating your EMI can be tedious and extensive work for you, you can make use of Letzbank EMI calculator and calculate your loan EMI. You can typically calculate all types of Loan EMI making use of the above mentioned formula, however for the ease of the customers various types of EMI calculators have been designed, where all you need to do is to enter the loan amount, the rate of interest, and the loan tenure for which you are borrowing the loan. Enlisted below are various types of EMI calculators that available on Letzbank website:
1. Home Loan EMI calculator: home loan EMI Calculator is one of the most important tools that isavailable to you if you are interested in buying a home. It can show various common features associated with an EMIsuch as loan tenure, monthly payment, rate of interest etc. Apart from this, a Home Loan EMI Calculator offers facility that includes prepayment towards the home loan payment. It is very important that the borrowers opt for prepayment of EMI while applying for a home loan.
2. Car Loan EMI calculator: The Car loan EMI Calculator can be used for calculating monthly payments that you have to pay in return to buy a car. This calculator will also tell you about your monthly EMI, date of payments, processing charges etc. Down payment that you pay for your car loan will not be considered for calculating your car loan EMI.
3. Personal Loan EMI calculator: personal loan EMI Calculatorr is the best tool available for a borrower going for a personal loan from a bank. Personal Loan EMI Calculator will also ask you information about your current organization, total work experience, other tenure etc. to calculate your personal loan.
Advantages of Using EMI Calculator
✔ The first and foremost thing about making use of an EMI Calculator is that you do not have to do those extensive calculations on your own.
✔ You get to know your loan EMI
✔ You can view your loan stages throughout the loan tenure.
✔ You will be able to view the amortization table.
✔ You will know the interest component charged over the loan borrowed.
✔ Knowing your EMI will help you plan your finances especially during the loan tenure.Main Category: Loans