What is EMI?
The Equated Monthly Instalment, or EMI, is the fixed monthly payment a borrower makes to repay their loan.It consists of two parts: principal and interest, and is normally paid on a monthly basis.
How to use the EMI calculator?
You can use an EMI calculator to figure out how much your EMI for a personal loan, a home loan, or even a car loan will be.All you have to do is enter the loan amount, repayment term, and interest rate.It then displays the EMI amount as well as the total interest due.
How are EMIs calculated on loans with a floating interest rate?
In contrast to a set rate, a floating rate fluctuates according on market conditions.
It is usually linked to the Reserve Bank of India's (RBI) base rate.Changes in interest rates aren't always reflected in your EMI; instead, the loan's term may lengthen or shorten as a result.
What is the importance of an EMI Calculator?
You can find out the following in seconds with an EMI calculator:
The amount of your Equated Monthly Instalment
The entire amount of interest due on your loan
The whole amount you must repay (principal plus interest), often known as the loan's total cost.
To arrive at an EMI that you can afford, you can adjust the loan tenure or loan amount.
You can also compare rates to choose the one that best matches your needs because interest rates effect EMIs.
How do EMI Calculators work?
The formula for calculating EMIs is:
EMI = p × r × (1 + r)n/((1 + r)n - 1)
Here,
P = loan amount
r = rate of interest
n = loan tenure in months
Enter the loan amount you want to borrow, the loan tenure you want to repay the money over, and the interest rate charged by your lender to calculate your EMI.
What are the types of EMI Calculators?
EMI Calculators are divided into three categories:
House Loan EMI Calculator: This tool is designed to figure out how much a home loan will cost.For example, if you obtain a home loan of Rs 20 lakh for a 20-year term at a 10.5 percent interest rate, plugging in these numbers will give you an EMI of Rs 19,968.
Personal Loan EMI Calculator: This calculator can help you calculate your personal loan EMI.Consider this scenario: you borrow Rs 5 lakh for personal purposes at a rate of 10.5 percent with a 5-year repayment period.Your monthly liability, according to the calculator, will be Rs 10,747.
Car Loan EMI Calculator: Use this tool to figure out how much you owe on your car loan.Consider the following scenario: You take out a Rs 8 lakh automobile loan at an interest rate of 8.9%.Using the calculator, you can calculate that your EMI for an 8-year payback period will be Rs 11,679.
What are the factors that can impact your EMI amount?
Your EMI will grow when interest rates and loan amounts rise.
Longer repayment terms lower your EMI but raise the total amount of interest you must pay.
You can alter the EMI amount according to your convenience using a flexible EMI arrangement.
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