EMI stands for equated monthly instalment. It is a form of instalment that the borrower has to pay to the lender after taking a loan from him. There are several types of loans that are designed or planned by the financial institutions, and their rate of interest is different. It is very difficult for the borrower to check the EMI of each loan manually. To make their process easier, many renowned financial companies have developed EMI calculator. It is one of the most important tools that help you to determine the exact EMI cost that you have to pay after receiving a loan from the lender. Though there is also a formula that is used to calculate EMI many times it gives you the wrong value. If you are good in maths, you can either take the help of the formula or you can use the EMI calculator to calculate EMI.
In this blog, we are going to tell you the importance of EMI calculator where it will help you in the loan process. So, let’s get started.
Before telling the importance of the EMI calculator, we will tell you the formula that will give you the exact value of the EMI of the loan.
EMI Amount = [P x R x (1+R)^N]/[(1+R)^N-1],
Here P stands for the principal amount, R stands for rate of the interest, and N stands for a number of years which loan has been taken.
Now let’s look at the importance of the EMI calculator:
The tenure of the loan:
The use of the EMI calculator is beyond calculating EMI. It also helps you to determine the tenure period. If you want to pay the bigger EMI, the rate of the interest is low and tenure period also. To determine the EMI first, you need to calculate the tenure of the loan, and that can be calculated with the help of the EMI calculator.
Interest rate:
If you are taking a huge amount from the bank, you can check the best interest rates value of the banks by alternating the value. It is impossible to compare the interest rates of the several banks manually, but you can calculate EMI by taking the help of the online EMI calculator. You can determine the best rate of interest by altering the value until you get satisfied.
Loan eligibility:
EMI calculator not only helps you to determine the EMI values, tenure period or rate of interest. You can also check whether you are an ideal candidate for the loan or not by entering your personal and financial details. Before making contact with the banks, you can read their eligibility criteria and take the help of the EMI calculator, enter your details, and then it will tell you whether you are eligible for a particular loan or not.
Final Say:
We hope now you understand the importance of the EMI calculator to calculate EMI If you are looking for the loan and wanted to know the tenure period, the best interest rates and the EMI value take the help of the EMI calculator.
