Be it a home, a car or a vacation, buying it must be a dream for everyone. It becomes a reality when you calculate the loan and expenses with the help of an EMI calculator. With an EMI facility, repayments for your loans are made comfortable.
Equated Monthly Instalments (EMI) are the monthly payments you payback for the loans you have borrowed from the lenders. EMI is the calculation of the principal portion of the loan amount and the rate of interest. Therefore,
EMI = principal amount + interest
EMI amount is usually fixed until the end of the repayment tenure of your loan, which is paid on a monthly basis. The EMIs may be calculated by using a loan EMI calculator for the different kinds of products you wish to buy. Lenders have made it easy for the customers by creating an EMI calculator online available on their websites.
EMI calculation for a loan is very simple and easy. You have to just enter the loan amount, tenure and the interest rates. You will get accurate results for the following if you use the EMI interest calculator:
To make it simple, an EMI calculator is a tool that does each and every calculation for you. You have to just provide the details like loan amount, duration, the interest rates along with the processing fee and the calculator will display the answers within a fraction of a second.
Basic formula of EMI calculator:
EMI = P x r x (1+r)^n/((1+r)^n – 1)
EMI is identified as the monthly instalment to pay every month
P is the loan amount.
R is the rate of interest, calculated on a monthly basis instead of the annual rate of interest. It is achieved with the formula r = (annual interest/12) x 100.
N is the duration of the loan.
The above mentioned EMI calculator formula is the most basic one derived by most of the lenders; however, some include the processing fee as well in the monthly instalments. The processing fee will range from 1 to 3 per cent, but it differs according to the lender.
Other than the online EMI calculators, EMIs can also be calculated using an EMI formula in Excel sheet with the following:
EMI = (P X R/12) X [(1+R/12) ^N] / [(1+R/12) ^N-1]
But there is a disadvantage in the EMI calculator excel, since you have to enter the numbers accurately so that the answer is perfect. If you fail to enter the accurate numbers, then it will result in miscalculation. Whereas in the EMI calculator online, it will convert the monthly rates on its own along with the processing fees and prepayment charges.
EMI calculator is a great tool to use, it is simple and easy to access as well. You have to just enter the When compared to floating rate of interest, it is relatively higher. It is preferable for those who borrowed amount, interest rates and tenure in the EMI interest calculator tool. It applies for all types of loan like Home loans, Gold loans, Business loans and simple interest loans too. You just have to click on the calculate button.
Fixed interest rates in a loan are defined as the rate of interest is fixed throughout the tenure. When compared to the floating rate of interest, it is relatively higher. It is preferable for those who don’t want to risk the fluctuation in interests during market inflation. In this case, EMI will remain the same till the end of the tenure.
On the other hand, floating interest rates will change depending on the lending rate of the market. The floating rate of interest will increase when the lending rate increases and is known as the variable rate of interest. It is usually lower as it gives the borrower a risk of increasing the interest rates during the loan tenure. However, it completely depends on the rise of the interest rate, whether you can expect a decrease or increase.
Each EMIs contributes to the borrowed amount along with the interest. But the proportion of the principal amount and interest varies over time. All the lenders follow the same mathematical formula and therefore, the offers ,and repayment schedule are similar.
You also have to know that the initial loan EMIs contribute more towards the interest. And later during the tenure of the repayment, the principal amount contribution will be more than the interest, possibly at the end of the tenure.
Part-prepayments reduce the interest and the principal amount due in the outstanding loan amount to the lender. The loan will be paid faster since the EMIs will remain the same and the tenure will reduce as a solid amount is deposited to the lender.
To pay an EMI with ShriramCity online, you have to just log in to our website Shriramcity.in and process your Shriram City online payment by filling your account details. Our website is designed on a user-friendly basis so that you can make your payments easily.
To pay your monthly EMIs, you can also download our Shriram City Mobile App (Shricity) available for android smartphones. You just have to enter your account details and log in to the payment mode. And then you can enjoy the benefit of paying your monthly EMIs from wherever you are in just one click in our Shriram city union finance online payment app.
Your EMI due will be notified by the lender after the loan gets disbursed to your account. Nowadays as per the NACH mandate, repayment of EMIs will directly get debited from your bank account. However, you have to submit post-dated cheques for security purpose.
This happens only if your loan is a floating rate loan. During the tenure, a higher amount will be adjusted towards the principal amount and it will be repaid sooner if the interest reduces. In the case of an increase in interest, a greater portion will be adjusted in the interest and it will impact the loan tenure but the EMI will be the same.
You will repay your loan sooner, when you partially prepay the loan if the EMI is not changed. However, if you reduce the EMIs as you have partially paid the loan amount, your tenure will remain unchanged.
The tenure of the loan will increase if you skip the EMIs, it may be due to the insufficient balance or any other cause. But you have to remember that skipping EMIS will impact on your credit score and will stop you from borrowing any other loans. Hence, make sure you are wise enough to pay the EMIs at the specified time and withstand your financial well being.
The EMI calculator online is a ready to use tool whereas in the EMI calculator excel is a platform where you have to program the sheet before using it. It is a tedious task and complicated to use the calculators excel and especially if you’re not well versed with the software. And that’s the reason for everyone choosing the online EMI calculator.
Before closing your loans, you have to understand one point. And that is making timely payments will improve your credit score. It will have a negative impact on your creditworthiness and the banks will charge a penalty for prepayments as well. Therefore, opting to prepay the loan, to reduce the loan interest to save interest payments might not be a great idea.