When you are seeking a loan, you have a good idea of the amount you want. You can also decide the amount you can spare each month towards the repayment. Loan terms including interest rates vary with each lender. You also have to take into account various fees and charges.
Choosing the right loan calculator tool
There are loan calculators available online, and there are different types of calculators. You can find tools for calculating EMI on different types of loans. These include personal loan EMI calculator, home loan EMI calculator, and car loan EMI calculator.
Loan eligibility calculator, tenure calculator, and interest calculator are the other types of tools.
EMI calculators allow you to find out the Equated Monthly Installments you would have to pay on the loan. You can calculate them for various amounts, tenures, and interest rates. When you are comparing loan offers from various banks, you can use an EMI calculator. Enter the loan amount, interest rate and tenure. If you want to pay a lower or higher EMI, play around with the tenure and interest rates.
You should use this type of loan calculator first, before you decide how much you should borrow. With this tool, you feed in the EMI you can afford, the interest rate, the tenure. Based on these, the calculator will give you the amount you can afford to borrow. You can then do a comparison of loan offers for this amount.
Loan interest calculators can come in very handy when considering instant EMI offers. You should be careful about choosing the right offers here. For instance, you may can get a quote with a monthly interest rate that seems reasonable to you. The actual annual interest you pay on the loan, however, could work out to 10 times the monthly rate quoted. Calculate the interest by giving in necessary details and get your finances sorted.
Before apply the personal loan you can use these tools to determine the optimal tenure for the loan amount you want. You can enter the loan amount, the EMI and interest rate. You will get the tenure that you will have to choose to repay the loan with the EMI you have chosen. You can try changing the interest rate and EMI to find whether you can afford shorter tenures.
Loan Calculators: More options
There are various other options on how you use online loan calculators. You can get a simple breakup of EMI, amortisation schedule and the interest you pay. You can get detailed results like the loan terms that you can get from various lenders. A graphical representation of the repayment schedule will help you analyse better. The reducing principal and interest components are also attained.
You can also enter more details to get more accurate results. For instance processing charges. This will give you a good idea of how well you can manage the repayment of the loan.
You can of course sit down and calculate the EMI yourself. If you want a home loan, decide on the amount you want as loan. Then sit down with a pen and paper. Do the housing loan EMI calculation yourself, for various tenures and interest rates. Find the optimal tenure you will have to choose for the loan amount.
This will be a tedious process especially if you are examining offers from many lenders. So, make your life easy, use online loan calculators. Use a personal loan calculator to determine EMI, tenure and rates of interest. You can compare various offers and choose one that best suits your requirements.