Different Types Of EMI Calculator For Loans In 2023

Feb 13th 2024
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Exploring Various EMI Calculators for Loans in 2023

Different types of EMI calculators for loans, If you are going to apply for any type of loan like a personal loan, home loan, car loan, or others, you are more likely to use an EMI calculator beforehand to determine the monthly instalment against the borrowed loan amount. This is a very useful tool used by borrowers to get a deeper insight into the loan they are applying for. By understanding the EMIs they are supposed to pay for a loan, they can easily plan their finances accordingly. In this post, let’s delve deep to learn more about EMI and the different types of EMI calculators.

What Is An EMI?

For the benefit of its customers, a financial organization known as an EMI (or electronic money institution) supports digital (or e-money) transactions.

As the name "electronic" implies, electronic money institutions typically conduct business online. Some EMIs, however, could also have physical locations, in which case customers can visit them in person just like they would a typical bank.

What Is A Loan EMI Calculator?

A loan EMI calculator is an online tool that helps borrowers determine the monthly installment amount they expect to pay against the borrowed loan amount. This calculator can be used to determine the EMI amount for any type of loan like personal loans, home loans, car loans, etc.

You just need to enter the loan amount, applicable interest rate, and loan tenure. Once entered, the calculator would instantly show the monthly EMI amount on the screen.

How The Loan EMIs Are Calculated?

The easy-to-use mathematical formula to calculate EMI is given below:

Equated monthly installment = p × r × (1 + r)^n/((1 + r)^n - 1)

Whereas

  • p refers to the principal loan amount,
  • r is the interest rate charged by the lender, and
  • n refers to the tenure of the loan in several months

Let's now imagine that someone takes out a loan for Rs. 1 lakh with a 12-month term at a 10% interest rate. The following formula would be used to determine the EMI:

EMI is defined as p r (1 + r)n/((1 + r)n - 1)

EMI is 1 lakh times (0.1/12) times (1+(0.1/12))12/((1+10)12-1

EMI = 8791.60

Interest in total is 5499.20

Paid in full: 105499.20

EMI Calculation Using Mathematical Formula

The formula to calculate EMI using a mathematical formula is:

p × r × (1 + r)^n/((1 + r)^n - 1)

Whereas

  • p refers to the principal loan amount,
  • r is the interest rate charged by the lender, and
  • n refers to the tenure of the loan in several months

EMI Calculation Using Excel Sheet

You may use a loan EMI calculator excel if you don't want to or find it difficult to calculate the EMI manually. In comparison to manual computations, it is simpler to use and produces accurate and quicker results.

You must choose a cell in an EMI calculator Excel sheet and enter the following PMT formula:

=PMT (RATE, NPER, PV, FV, TYPE)

 This formula reads:

In finance, PMT stands for payment. The PMT Excel function assists in computing the total monthly payments made against a loan or investment over a specified number of periods at a fixed rate of interest.

RATE is the term for the interest rate that applies to the loan amount.

NPER stands for either the total number of monthly payments you must make or the length of the loan tenure term in the EMI calculation method in Excel stated above.

The principal loan amount is denoted by PV in the Excel loan calculator above.

NPER stands for either the total number of monthly payments you must make or the length of the loan tenure term in the EMI calculation method in Excel stated above.

The principal loan amount is denoted by PV in the Excel loan calculator above.

Future Value (FV) is the sum that remains after all payments have been made or the future value.

The optional addition "Type" is used to specify the moment the money is credited. The function that specifies that the payment must be made at the start of the month is represented by the number 0.

The example shown below demonstrates how an Excel sheet with a house loan EMI calculator can be used to determine the monthly payment for a home loan.

Types of EMI Calculator

Essentially, the classification of the EMI calculator is done based on the type of loan that is being taken. So, in the following part, let’s look at the major types of EMI calculators available today.

1. Home Loan EMI Calculator

As its name implies, a home loan EMI calculator is meant to help the borrowers in determining the monthly payment they need to make against the taken home loan amount. A user just needs to enter a few details and the calculator will show the expected EMI basis of the inputs fed.

2. Car Loan EMI Calculator

The monthly payments required to purchase a car may be calculated using the auto loan EMI calculator. Additionally, this calculator will provide you with information on your monthly EMI payments, payment due dates, processing fees, etc. Your down payment for your auto loan will not be taken into account when determining your auto loan EMI.

Calculate Your EMI With EMI Calculator- EMI Calculator

3. Personal Loan EMI Calculator

The finest tool available for a borrower applying for a personal loan from a bank is the personal loan EMI calculator. To determine your loan eligibility, the EMI calculator will also ask you for details about your present company, overall work history, tenure, etc.

4. Loan Against Property EMI Calculator

You may use your property to receive cash for your requirements by using the loan against the property EMI calculator. Your monthly EMI will be determined by an EMI calculator for loan against property using standard variables like loan amount, rate of interest, loan tenure, etc.

What Is A Loan Amortization Schedule?

A loan amortization schedule is a kind of table where the loan information is shown in a tabular format along with the EMI payment. The breakdown of an EMI payment's principle and interest components is shown in this table. This timetable makes it easier for the borrower to understand how much of the loan has been repaid and how much is still owed. It includes all of the necessary information for an EMI Calculator, including the due date, the EMI, the interest rate, the principal payment, and the balance owed. This Loan Amortisation Schedule is highly useful in situations where the borrower seeks to refinance or foreclose on the loan.

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Benefits of EMI Calculator

Below are some of the prime benefits of using an EMI calculator online.

Simple To Use – An EMI calculator is easy to use and offers guidance at each stage. The lender would go over and above to make sure the borrower understands how to utilize the Loan EMI calculator if they respect their customers' comfort and clarity. All you have to do is go to the lender's website. After that, you must input the loan amount you want to take out, your selected interest rate, and the payback period you choose.

Precise Results - You may save time and receive precise, immediate answers for several loan alternatives in a matter of minutes or even seconds by using an online EMI calculator. Additionally, the algorithm allows you to experiment with different loan amounts and adjust the variables impacting your EMI without harming your credit score.

Check Credit Score- 

Time Savings - You may calculate your loan's EMI online, saving yourself the time and effort of having to visit the bank, stand in queue, and wait around. After that, the loan application process is complete. Additionally, the burden of gathering a tonne of paperwork or speaking with a representative to figure out the personal loan amount and interest rates is removed. An EMI calculator may be used on the move, during a break at work, or even while on vacation at the other end of the world because it is online.

Eases Loan Planning – The results of an EMI calculator are not limited to the EMI payment amount. Additionally, it provides you with a table or amortization plan for the whole term of the personal loan. A schedule or table that shows a breakdown of the loan amount you must repay throughout the duration is referred to as an amortization schedule, despite its verbose tone. The exact percentage of the principal and interest rate that must be paid each month until the loan term is over is shown in the amortization table. Throughout the loan, the amounts on the amortization schedule are equal. Having access to this data can help you prepare your loan payments in advance and prevent payment default.

Simple Comparison - You may compare the amount of interest and principal that must be paid for various loan amounts and terms by using an EMI calculator without having any negative effects on your credit score. You may easily conduct gentle inquiries. Additionally, you are not required to pay a representative or middleman to perform these computations and comparisons for you. You may easily experiment with different financing alternatives in this manner. You may also comprehend the loan amount that won't interfere with your regular monthly spending, day-to-day expenses, and overall way of life.

How To Use Investkraft EMI Calculator?

Using an EMI calculator on Investkraft is very easy as you just need to enter a few details like the principal amount, interest rate, and loan tenure. After you enter these details, click on calculate EMI and the tool will show the monthly amount that you would have to pay against the loan amount.

FAQs

What Does EMI Stand For?

‘EMI’ stands for Equated Monthly Installment.

What Would Happen If The Interest Rate Goes Up Or Down During The Loan Tenure?

If the interest rate drops throughout the term of a floating rate loan, the principal will be increased and the loan will be paid off sooner. Assuming the EMI stays the same, a modest change in loan duration results from an increase in interest rates since a bigger share of the adjustment is made to the interest rather than the principal.

What Components Make Into An EMI?

Part of your principle and interest are represented by an Equated Monthly Instalment. Up to the conclusion of the term, it must be paid. As an alternative, you can pay the obligation in full all at once.

The Conclusion

No matter what type of loan you are interested in, using an EMI calculator online is undoubtedly the best way to plan for it. Be it a personal loan, home loan, car loan, or any other type of credit, an EMI calculator can be used for various purposes and helps borrowers in finding the close amount of the monthly installment against the borrowed loan amount.

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