6 Types of EMI Calculators and How to Use Them
Equated Monthly Instalment or EMI as it is commonly called is the amount that borrower of a loan has to pay to the lender bank or financial institution at regular intervals. The borrower needs to consider various factors while applying for a loan and EMIs are one of the most important out of all. The loan EMIs can be easily computed with the help of several online EMI calculators. These calculators are available for free and can be used by anyone who finds EMI calculation rather complex.
Types of EMI calculators:
Here’s a detailed description of the types of EMI calculators available online.
1. Home Loan EMI Calculator
This type of calculator is very useful for an individual who is planning to buy a home. It not only provides information on the monthly payment, tenure, and rate of interest but also facilitates adding planned pre-payment towards the payment of the loan. This feature sets the home loan EMI calculator apart as accounts for the pre-payments while showing the payable instalments and the breakup of the expenses. This breakup includes the amount borrowed, payable interest, and the amount that shall be paid as prepayment.
2. Car Loan EMI Calculator
This is another EMI calculator that shows the monthly instalments the borrower needs to pay for buying a car. Not considering the down payment made while purchasing the car, this calculator provides the user with the monthly payable instalment, the date of payment of the EMI, processing charges, and many more such relevant details. The user just needs to enter the amount he plans to borrow, the interest rates chargeable, and the tenure of the loan. The output of this calculator also shows the breakdown of the expenses and the amortisation table.
3. Personal Loan EMI Calculator
The personal loan EMI calculator is a very useful tool for an individual planning to take a personal loan from any bank or financial institution. This calculator however also asks for certain details such as the employment details and work experience of the borrower to check for his eligibility for the loan. Thus till tool helps in analyzing the affordability of the borrower which can help in avoid over-borrowing of funds. This EMI calculator comes with functionality enabling you to provide any planned prepayment the user might pay.
4. Loan against Property EMI Calculator
It is good to know that individuals looking for a loan can use their property to get funds for their financial needs. This EMI calculator asks the basic parameters such as the amount borrowed, tenure of the loan, and interest rate as inputs and provides all the necessary information in its output.
5. Business Loan EMI Calculator
Like all other types of loans, even a business loan is repaired by the borrower in equal monthly instalments over a set period. Anyone who is opting for a business loan is undoubtedly ought to be busy and occupied with diverse other tasks in hand. The manual computation would be too time-consuming and might lead to several errors in such a situation. For such individuals, an online EMI calculator can act as a great help in calculating their EMI amounts. These calculators are available on the website of numerous banks and other financial institutions and can be used for free. Not only is the online calculator easy to understand and use but it also provides instant results without any error. One of the biggest advantages of a business loan EMI calculator is that the borrower can try out various blends of the loan amount, interest rates, and the tenure and choose the most suitable combination.
The formula used to calculate business loan EMI is given by:
E = P*r* (1+r)^n/([(1+r)^n]-1),
E = Equated Monthly Instalment
P = Principal loan amount
R = Interest rate
N = Tenure of the loan
To use this calculator, the user needs to provide the loan amount, tenure, and the interest rate levied. The calculator instantly provides an amortization table representing the periodic loan repayment schedule. The table consists of the instalments, outstanding dues after the payment of each EMI, and the interest payments. The tabular representation aids in the easy comparison of the various combination which the borrower can use to pick the most suitable loan amount and tenure as per his repayment capability.
The calculator can also give a loan repayment calendar based on the prepayment of loans thus making it an essential tool for all the business loan takers.
6. Simple Interest Loan EMI Calculator
The simple interest loan EMI calculator is used to compute the simple interest that shall be paid for a given loan amount based on the tenure of the loan and the rate of interest levied. This calculator is easy to use and provides accurate information instantly. All that the user needs to enter is the amount borrowed, rate of interest, and the period for which the loan is to be taken. For instance, the user borrows a loan of INR 3 lakhs at a simple interest of 4% per annum for 2 years, then he will be paying a simple interest of INR 24,000 i.e INR 1000 per month.