Calculate your EMI
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How Does An EMI Calculator Work?
Use our EMI calculator to calculate the monthly installment amount on your home loan, car loan, education loan, personal loan or loan against property & business.
- Loan Amount: Loan amount is the amount borrowed from any financial institution to meet your financial needs.
- Loan Tenure: Loan tenure is the period in which the principal loan amount and the interest is paid in monthly installments to repay the loan.
- Rate of Interest: Rate of Interest is the interest paid on the loan borrowed from the financial institution. The interest rate varies for each lender. In general the interest rate on personal loan, education loan and car loan are fixed for the entire loan period. Incase of home loan, loan against property and business loan, the interest rate may vary during the loan period. Hence it’s always better to monitor your loans in the same way you monitor your investments.
Terms to be known
- Change in interest rate: Loan interest rates can be fixed, floating, or hybrid. In case of a fixed interest rate, the rate remains the same over the loan period. A floating interest rate is linked to the MCLR (Marginal Cost of Funds Based Lending Rate) and can change multiple times over the loan period. This may change the EMI calculation for your loan. A loan with a hybrid interest rate has a fixed interest for a certain duration, after which the interest rate is decided by the MCLR. The EMI can change even for such loans.
- Change in tenure: If you change banks and carry over your loan to the new bank, the tenure of your loan may change in some cases. This will affect your EMI calculation. The EMI can decrease if the tenure increases and vice versa.
- Prepayment of loan: If you prepay your loan, the prepayment amount will be deducted from the original principal, effectively reducing your loan amount. If the tenure remains the same, the EMI can either decrease or stay the same. In the latter scenario, the portion of the EMI used for repaying the principal will increase, since the effective interest would be lesser than the original calculation.
Benefits of EMI Calculator
Even before you apply for a loan, you need to know if you have the ability to obtain a loan. This can be done with the help of a EMI Calculator. Calculating your EMI will let you budget better in order to make the EMI payments on time. The other benefits of the EMI Calculator include:
- Accessibility: You can use the EMI Calculator anytime, anywhere and make your budget calculations.
- Accuracy: Using a EMI Calculator is more accurate than calculating the numbers yourself.
- Financial Planning: As stated above, EMI calculations need to be done even before you start your loan application. A EMI Calculator can help you with this.
