Shrishti has been considering taking the leap and getting a personal loan to pursue her master’s degree at a reputed university in India. As she sits down to calculate how much loan she can avail, and how much interest she would have to pay for the same, she gets incredibly confused. Upon searching online she founds a very convenient EMI calculator which helps her understand how she can plan out her finances better. This is because EMI calculators help you understand given your loan amount, how much you will have to pay in the form of monthly instalments. You can read on to find out more about how to use an EMI calculator and how this can help you in the process of financial planning.
What is an EMI calculator?
The EMI of any loan depends on three major factors: the amount of loan you wish to obtain, the interest rate you will charge and the tenure of your loan. While the loan amount and tenure will be as per your requirements, the interest rate that you will be charged will depend on your eligibility of the loan. Your EMI consists of both a portion of your principal loan amount and interest amount, payable every month. Although your EMI paid every month will be the same, the amount that you pay towards both principal and interest will change during the tenure of your loan. Towards the beginning tenure of your loan, the interest will be a majority of your EMI payment, however, as the loan period continues to progress and the principal amount you owe reduces, the portion of the interest you are repaying also reduces.
Can my EMIs change after I have taken out my loan?
As mentioned above, when you are taking out a loan to meet any financial goals, your EMI can be calculated using an EMI calculator available online. This helps you in planning out your finances better. However, it is important to note that your EMI can change due to a number of reasons, including if your interest rate changes, if you partially repay your loan, if your loan tenure is reduced or extended and if you have chosen a flexible-EMI scheme.
Both interest rates and the tenure of your loan can change due to a number of reasons. If you have opted for a loan which has a floating rate of interest, the EMI of your loan can also be impacted, depending on the repo rate announced by the Reserve Bank of India. Similarly, if you opt to get your loan tenure extended or reduced, you will also be paying a different EMI. If you extend your loan tenure, you will be paying more money in interest in the long term. On the other hand, a shorter tenure will mean that you will be paying lesser in interest payments.
Additionally, if you choose to repay a part of your loan, the principal amount of your loan will reduce. You may have to pay an additional fee to pay back your loan before the policy term ends. If you have any more questions about the same, you can speak to a trusted financial advisor on a portal such as Finserv MARKETS that provides 24×7 support and assistance on the loan process. Lastly, if you have chosen to opt for a flexible EMI scheme which lets you pay more EMI in line with salary increases, your EMI will vary over the course of your loan tenure.
Using EMI calculators to help decipher how much loan you should take out, for how long and how much interest you can pay is critical in financial planning. You can use the EMI calculator to adjust the loan amount and tenure to find out what the total cost of the loan will be within your repayment capacity. EMI calculators can be used to figure out your financial plan regardless of the type of loan you wish to take out: home loan, personal loan, educational loan or any other.
You can shop for a personal loan online on Finserv MARKETS whereby, you can get competitive rates of Bajaj Finserv business loan interest rates which can reduce the additional financial burden that comes with taking on a business loan. Business loans offered through Finserv MARKETS require minimal documentation and you can get approval in 3 minutes and money in your account in 24 hours. What’s more, is that there is minimal documentation and you get all the information about your loan upfront, there are no hidden charges.
Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!