Be it a car, home or gold loan, EMIs (Equated Monthly Installments) are an integral part of it. Whenever a potential borrower plans to avail a loan, they agree to repay the loan amount in monthly installments, which includes both principal and rate of interest.
These are important for borrowers as they provide a fixed schedule for repayment, making it relatively easy for them to plan their finances and set their monthly budget accordingly.
(Tip: Download EMI calculator app before availing a loan.)
What is an EMI?
An equated monthly instalment (EMI) is a type of monthly payment made by borrowers to lenders in a fixed amount. It includes both the interest and principal amounts, and after a certain number of EMIs are made, the loan is finally paid off.
When it comes to how it is calculated, well, there are certain factors that play an essential role here. It includes the rate of interest and deposit tenure. The borrower pays the EMI amount each month, which includes both the principal amount and the interest component of the loan.
What is an EMI calculator?
As the name implies, it is an online tool that helps borrowers estimate the EMI that they’ll have to pay for a specific loan amount, rate of interest and tenure of the loan. In order to use this tool, you just need to download the right application on your internet-enabled smartphone. Then, based on the inputs you receive from this tool, one can easily generate the EMI amount they’ll have to pay.
What are its advantages?
● Accurate Estimation
Once you download emi calculator app and start using this tool, you are in for accurate estimations of the EMIs. This’ll help you plan finances effectively.
Calculating monthly installments on a piece of paper can be a time-consuming process. However, the tool gives you the exact figures within a blink of an eye.
● Easy to use
This tool is relatively easy to use and requires no such technical expertise. You just have to enter the required inputs, and you are more than good to go.
How to Use an EMI Calculator App for Different Types of Loans?
Here, I’d like to share my personal experience so readers can easily understand. Around three months ago, when I was planning to avail a loan, one of my colleagues told me about Bajaj Finserv, the perfect app. Believe me, it is one of the best applications to use if you are looking for such a tool.
- Download the Bajaj Finserv app on your smartphone
- Sign up by entering your mobile number
- Tap on the three bars at the top left on the home page
- Here, you’ll see ‘Calculators & Buying Guides’
- Further, Tap on ‘EMI Calculators for Loans’
- Experiment as per your requirement
Before availing a loan, using an EMI calculator app has become a mandatory step nowadays. It has helped potential borrowers to plan accordingly and set their financial goals accordingly.