Knowing how to calculate EMIs for a loan is a crucial step to take before you apply for a loan. This is because planning ahead helps you steer clear of pitfalls during repayment. Whether you are financing your vacation, covering the costs of a wedding, buying a house, or for any other purpose, you must know your EMIs.
Thankfully, digital EMI calculators are easily accessible online and these simplify loan planning greatly. It also allows you to plan prepayments, which help save money.
Read on to learn how to calculate EMI for a loan online and plan your repayment with this tool.
Compare the Lenders' Interest Rates
The interest rate is arguably the most crucial component of a loan, as it influences your EMI amount and total repayment amount. Thus, you must choose the lowest interest rate to lower the cost of the loan.
You can easily compare and select the most affordable options using an online EMI calculator for a personal loan. Consider that you need a personal loan of ₹45,000 for 18 months. Here is how your EMI and net repayment change with interest rate.
Disclaimer: The aforementioned values have been calculated using the Bajaj Markets EMI calculator.
This table highlights the actual difference between two interest rates, helping you make a more informed decision.
Identify Comfortable EMIs
An EMI calculator can help you decide on a comfortable EMI amount that doesn't strain your income. To do this, you must enter all your loan details in the calculator and generate the EMI amount. Then, tweak the values until you find terms that fit your budget comfortably. Here are a few tips to try:
· Decrease the loan amount to lower your EMI amount
· Increase the tenure to lower your EMIs
· Decrease the tenure to lower your interest payable
Choose from Flexible Tenure Options
Tenure and EMI amounts have an inverse relationship. If you increase your tenure, your EMI will decrease, and vice versa. Thus, knowing how to calculate EMI for a loan with an EMI calculator can help you choose the most suitable tenure from the lender’s tenure option.
Here is a table showing different EMI amounts calculated for variable tenure for a personal loan of ₹45,000 at a 10.50% annual interest rate.
Disclaimer: The aforementioned values have been calculated using the Bajaj Markets EMI calculator.
Here, the total payable amount increases while your EMI decreases. This happens as your tenure increases, and can be a smart choice if you want affordable EMIs. However, if you can handle higher monthly payments, opt for a shorter tenure.
Plan Your Prepayment and Budget
With tools like the Bajaj Markets: EMI Calculator App, you get access to an amortisation schedule. This schedule gives you a breakdown of your principal amount due and interest liable on it. It clearly highlights sections in the tenure when interest outgo is high, and this is when you should prepay.
Remember, the interest you owe is calculated based on the outstanding principal. So, if you prepay efficiently, you can reduce your interest outgo.
Benefits of Using a Personal Loan EMI Calculator
Here are some additional benefits of using tools like the Bajaj Markets: EMI Calculator App for financial planning.
l You get accurate results every time you calculate your EMIs
l It can help you make quick decisions regarding your loan terms
l It helps you better understand your loan breakdown
l It saves time as there are no manual calculations for comparisons
l It generates instant results, so you don't have to wait to know your loan terms
l It has an intuitive interface, accessible to all users
l You can easily access it on your smartphone for round-the-clock availability
How to Use Bajaj Markets: EMI Calculator App
Now that you know its uses and benefits, learn how to calculate EMI for a loan with the Bajaj Markets: EMI Calculator App.
l Step 1: Download and launch the Bajaj Markets: EMI Calculator App
l Step 2: Log in on the app using your mobile number and OTP
l Step 3: Choose your preferred loan type, from Personal Loan, Business Loan, Home Loan, etc.
l Step 4: Enter the amount, tenure and interest rate by entering the figures or using the toggle
l Step 5: Adjust the values until you get a suitable EMI option
The Bajaj Markets: EMI Calculator App is a powerful tool and you should use it to compare and find the best loan terms for you. This app is your one-stop solution for all financial planning, including an FD calculator, investment calculator, SIP calculator and more. To get started, download the Bajaj Markets: EMI Calculator App today to take control of your finances.
