Ms Kiran wishes to avail car loan based on her monthly income which she can pay back smoothly. So before heading to the bank, she visits the website of the bank and calculates how much will be the EMI, using the EMI Calculator. She is willing to take a car loan of Rs 20 lakh, which she wants to repay over 10 years at an interest of 8.5%.
Ms Kiran could calculate the loan amount she can apply for loan, by using the loan calculator. She then accordingly took an informed decision, which she could handle it efficiently.
Loan amount calculator gives an estimate which assists greatly in determining, how much one should opt as a loan. It can be used for calculating Personal Loan, Business Loan and Home Loan. EMIs will remain fixed for the entire tenure for which a loan is applied for. However, the EMI components of principal repayment and interest payment change over the tenure.
Loan amount calculator is a free tool that allows a user to plan his/her finances in an informed way. Manual calculation may be incorrect at times, but that cannot be the case with the loan amount calculator. We shall discuss, how using a calculator is beneficial for the user.
EMI or Equated monthly instalments is the amount which the borrower has to pay every month to the financial institution towards loan taken. It is paid monthly on a pre-decided date either through a cheque or online payment.
It can be either for a personal loan, home loan, auto loan, business loan or a credit card loan. EMIs are calculated in two ways: the flat-rate method or the reducing balance method. The instalments are used to pay off both interest and principal so that over a specified number of years, the loan is paid off in full.
It is a duration for which the lender sanctions the loan amount. Different loans have different periods towards which the loan is sanctioned. car Loan have longer tenures as compared to personal loans, education loans, home loans.
If a borrower faces any sort of difficulty in repaying the loan within the stipulated time, some banks and financial institutions consider the genuine situation and extend the loan tenure for an extra fee and at a slightly higher interest rate.
The interest rate is typically noted on an annual basis known as the annual percentage rate. It is the amount which a lender charges for the use of the assets expressed as a percentage of the principal.
Normally a lender offers lower interest rates to borrowers who are low-risk profiles and higher interest rates to high-risk borrowers. Interest rate is influenced by several outside factors of inflation, lower money supply or a high demand for credit. Apart from borrower’s risk profile, above stated factors also has a major role to play in deciding the interest rate.
The interest rate can influence government monetary policies and corporate profits. Due to lack of affordable credit, the economy may worsen when the interest rate rises.
EMI Calculator provides a rough idea to know as much as you can, before taking the actual leap. User can play around the numbers and come to a conclusion, how much exactly they need to borrow from the lender. Following is the formula for calculating EMIs:
Let us take an example: Ms Susan wants to take a car loan of Rs 5 lakh for 3 years at an interest rate of 11.50% p.a. All she needs to do is visit the portal of Afinoz and click on the EMI Calculator. You can choose the calculators according the need of your loan.
Ms Susan gets to know the EMI amount would be around Rs 16,381. It seemed a bit high for her and she then decided to go for a lesser loan amount. A loan of Rs 3 lakh could cost her an EMI of Rs 9,828 with tenure and interest rate being the same. The difference was huge for her, which ultimately helped her in taking an informed decision which will suit her budget.