An EMI calculator is a tool that helps borrowers determine their EMI amount for a loan. It takes into account the loan amount, interest rate, and loan tenure.
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It's really important to handle your money well when you have to pay back a loan. One useful thing to help you with that is an EMI calculator. This tool is helpful when you want to buy something big like a house or a car and need a loan. The EMI calculator makes things easier by telling you how much you need to pay each month (your EMI). In this blog, we'll talk about EMI calculators, how to use them, why they're important, and what things can affect your loan EMI.
EMI stands for Equated Monthly Installment. EMI is the monthly installment you pay towards your loan at a specified interest rate over the loan tenure. An EMI has two components – principal repayment and interest. During the initial years, a significant portion of the EMI consists of the interest amount. However, towards the end of loan tenure, the principal amount makes up for a major part of the EMI payment.
An EMI calculator is a handy financial tool that helps individuals calculate their monthly loan installment with precision. It eliminates the need for complex manual calculations. By entering loan details, such as the loan amount, interest rate, and tenure, the calculator provides the borrower with the exact EMI amount they need to pay.
The EMI calculator uses a formula to compute the EMI based on the loan amount, interest rate, and tenure provided. It takes into account the reducing balance method, where the principal amount decreases with each payment made. This results in a lower interest payment over time. The formula used in the calculation is:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where: P = Loan amount R = Monthly interest rate (annual interest rate divided by 12) N = Loan tenure in months
The EMI calculator utilizes this formula to provide an accurate EMI amount in a matter of seconds. For a quicker and simpler way to calculate EMIs, you can just keep the OneScore EMI Calculator handy.
Step 1: Download the OneScore App
Step 2: Click on “Check My Score” to move ahead.
Step 3: Enter your mobile number.
Step 4: Enter the OTP for a secure app experience.
Step 5: Enter your email address.
Step 6: On the homepage, click on “Calculate EMI”.
Step 7: Select the loan type you want to calculate EMI, from Personal Loan/Home Loan/Auto Loan/Others.
Step 8: Input loan details: Enter the loan amount, interest rate, and loan tenure into the calculator. Ensure you have accurate information to obtain precise results.
Also read: How are interest rates on personal loan determined
Yes, EMI calculators are highly accurate, provided that the inputs entered are precise.
Yes, EMI calculators are versatile and can be used for home loans, car loans, personal loans, and other types of loans.
Yes, the EMI is fixed throughout the loan tenure, and the borrower is required to pay the same amount each month until the loan is fully repaid.
No, the EMI amount is fixed, and you cannot change it during the loan tenure. However, you can opt for loan prepayments, which can help you reduce the principal amount and lower the EMI.
In summary, an EMI calculator is an essential financial tool that can help individuals plan and manage their loans effectively. By providing accurate EMI calculations, borrowers can make informed decisions and ensure timely loan repayments. When using an EMI calculator, it is essential to input accurate information to obtain precise results. By understanding the factors that affect the EMI and the different types of EMI calculators available, borrowers can make informed financial decisions and manage their loans effectively.
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- OneScore , May 16, 2023