EMI stands for Equated Monthly Installment, which is a fixed amount of money that you pay every month to repay a loan. EMI calculators are online tools that help you estimate your monthly payments based on the loan amount, interest rate, and tenure. EMI calculators can be useful for planning your finances and budgeting your expenses.
Important Terms for EMI Calculation
To use an EMI calculator, you need to know the following terms:
Principal: This is the amount of money that you borrow from the lender. The higher the principal, the higher the EMI.
Interest Rate: This is the percentage of the principal that the lender charges as the cost of borrowing. The higher the interest rate, the higher the EMI.
Tenure: This is the duration of the loan, usually expressed in months or years. The longer the tenure, the lower the EMI.
The formula to calculate EMI is:
EMI = [P x R x (1+R)^N] / [(1+R)^N-1]
Where:
- P is the principal amount
- R is the monthly interest rate (annual rate divided by 12)
- N is the number of monthly installments
How to Use an EMI Calculator to Plan Your Loan Repayment
An EMI calculator is a handy tool that helps you estimate the monthly instalments you need to pay for your loan. EMI stands for equated monthly instalment, which is the fixed amount you pay every month until you repay the loan in full. The EMI consists of two components: the principal amount and the interest amount.
Using an EMI calculator, you can easily find out how much EMI you need to pay for a given loan amount, interest rate, and tenure. You can also adjust these parameters to see how they affect your EMI and the total interest payable. This way, you can plan your loan repayment according to your budget and financial goals.
How to Use an EMI Calculator
Using an EMI calculator is very simple and easy. All you need to do is follow these steps:
Enter the loan amount you wish to borrow.
Enter the interest rate offered by the lender.
Enter the loan tenure in months or years.
Choose whether you want to pay EMI in advance or in arrears (for car loans only).
Click on the calculate button to get the EMI, total interest payable, and total payment (principal + interest).
You can also view the amortisation schedule, which shows the break-up of the principal and interest components of each EMI, as well as the outstanding balance after each payment.
You can also change any of the input parameters and see how they affect the output values. For example, you can increase or decrease the loan amount, interest rate, or tenure and see how the EMI and interest change accordingly. This way, you can find the optimal combination of these factors that suits your needs and preferences.
Tips to Reduce Your EMI and Interest
While using an EMI calculator can help you plan your loan repayment, there are some tips you can follow to reduce your EMI and interest, such as:
Negotiate with the lender for a lower interest rate or a longer tenure.
Make a higher down payment or collateral to reduce the loan amount.
Make prepayments or part-payments whenever possible to reduce the principal amount and interest.
Choose a shorter tenure if you can afford higher EMIs to save on interest.
Compare different loan offers from various lenders and choose the one with the lowest EMI and interest.
An EMI calculator is a useful tool that can help you plan your loan repayment in a smart and efficient way. By using an EMI calculator, you can easily find out the EMI, total interest payable, and total payment for any loan amount, interest rate, and tenure. You can also adjust these parameters to see how they affect your EMI and interest and choose the best loan option for you. You can also follow some tips to reduce your EMI and interest and save money on your loan repayment.
Different Types of EMI Calculator
There are different types of EMI calculators, depending on the type of loan you want to calculate. Some of the common types are:
Personal loan EMI calculator: It is intended to assist individuals in determining their monthly repayments for personal loans. Personal loans are unsecured loans that can be used for various purposes, such as medical emergencies, home renovation, travel, education, etc.
Home loan EMI calculator: It helps potential homeowners estimate their monthly mortgage payments. Home loans are secured loans that are used to purchase or construct a residential property. Home loans usually have longer tenures and lower interest rates than other loans.
Car loan EMI calculator: It performs a similar function but is tailored to car loans. Car loans are secured loans that are used to buy a new or used car. Car loans typically have shorter tenures and higher interest rates than home loans.
Education loan EMI calculator: It helps students and parents calculate the monthly instalments for education loans. Education loans are unsecured loans that are used to fund higher studies in India or abroad. Education loans may have moratorium periods, during which the borrower does not have to pay any EMI.
Loan against property EMI calculator: It helps borrowers estimate the monthly payments for loans against property. Loans against property are secured loans that are taken by pledging a property as collateral. Loans against property can be used for any personal or business purpose.
You can use any of these EMI calculators to plan your loan repayment according to your budget and financial goals. You can also compare different loan offers from various lenders and choose the one with the lowest EMI and interest.
How to use Samco online EMI calculator?
To calculate your Equated Monthly Installment (EMI) using the Samco EMI calculator, follow these steps:
Loan Amount: Begin by entering the desired loan amount. This is the total amount you intend to borrow from Samco.
Rate of Interest (% P.A.): Specify the annual rate of interest applicable to your loan in percentage. This factor determines the cost of borrowing and contributes to the EMI calculation.
Loan Tenure (Years): Indicate the loan tenure in years. This represents the duration for which you plan to repay the loan.
Upon entering these details, the Samco EMI calculator will generate the following information:
Monthly EMI: This is the fixed monthly payment you need to make towards repaying your loan. It comprises both principal and interest components.
Principal Amount: The portion of your EMI allocated to the loan amount, reducing the principal with each payment.
Total Interest: The cumulative interest paid over the entire loan tenure.
Total Amount: The total repayment amount, which includes the principal amount and the total interest accrued.
Utilising the Samco EMI calculator empowers you to gain a comprehensive understanding of your loan repayment structure, allowing you to make informed financial decisions based on your budget and financial goals.
Advantages of using Samco EMI calculator
The Samco EMI calculator offers several benefits, such as:
It saves you time and effort by doing the complex calculations for you.
It gives you accurate and reliable results in seconds.
It helps you compare different loan options and choose the best one for you.
It helps you avoid any errors or miscalculations that could affect your loan repayment.
It helps you understand the impact of prepayments and part-payments on your EMI and interest.
You can reduce your EMI by choosing a lower principal amount, a lower interest rate, or a longer tenure. However, you should also consider the total interest payable and the affordability of the loan before making a decision.
What is the difference between EMI in advance and EMI in arrears?
EMI in advance means that you pay the first installment at the time of disbursal of the loan, while EMI in arrears means that you pay the first installment after one month of disbursal. EMI in advance reduces the interest component of the EMI, while EMI in arrears increases it.
What happens if I miss an EMI payment?
If you miss an EMI payment, you may have to pay a late payment fee and a penal interest rate. It may also affect your credit score and your eligibility for future loans. Therefore, it is advisable to pay your EMIs on time and avoid any defaults.
Is my EMI fixed or can it change over the loan tenure?
Your EMI is fixed if you have a fixed interest rate loan, which means that the interest rate remains constant throughout the loan tenure. Your EMI can change if you have a floating interest rate loan, which means that the interest rate varies according to the market conditions. In that case, your EMI may increase or decrease depending on the change in the interest rate.
How can I use an EMI calculator?
You can use an EMI calculator by entering the values of the principal amount, interest rate, and tenure in the respective fields. The calculator will then display the EMI amount, the total interest payable, and the amortisation schedule. You can also change the values and compare different scenarios.
Easy & quick