Everyone once at some point in life has to borrow a loan whether for buying a car or a dream house, for child’s higher education, wedding expenses or for other financial liabilities. Thus, loans have become an important part of everyone's life in today’s times.
A loan is a financial contract between the two parties, a lender and a borrower. Under this agreement, the lender gives a specific amount of money to the borrower with the aim that the amount borrowed is paid back with interest as monthly installments over a fixed period of time by the borrower. The monthly installment or EMIs is one part of the equally divided monthly outgoes to clear off an outstanding loan (both interest and principal).
One can easily calculate his or her monthly installment by an EMI calculator and can manage his or her monthly budget accordingly. The fastest and the quickest way calculating the EMIs is online EMI calculator. It is a finance calculator used to calculate your EMIs, compare EMIs for different loans and different tenures.
The EMI calculator works on the three variables, which are as follows-
- Loan amount
The loan principal is the original amount lent to you by the banks or NBFCs (Non-Banking Financial Companies). The amount of the loan depends upon a number of factors related to the loan applicant and the cost of the purchase. Higher the loan amount, higher is the EMI that you have to pay each month against your loan.
- Tenure of the loan
The loan tenure is the total time period given by the lenders for the repayment of the loan. The Loan tenure varies from the type of loans, loan principal and also the lender you are borrowing from. For example, personal loans are shorter tenure loans up to a maximum of 5 years whereas home loans are longer tenure loans which can go up to 25-30 years. The longer the loan tenure, the more will be the interest that you will have to pay and thus higher will be the EMIs.
- Interest Rate
It is the rate at which the interest is charged on the principal loan amount lent to the borrower. The interest rate also varies from one type of loan to another, on the loan amount lent and from one lender to another also. The rate of interest has a direct bearing on your monthly installment amount and it varies according to the type of interest rate charged on the loan, fixed, floating or hybrid. Hence, it is important to compare the interest rates offered by different lenders for a particular loan, before you make the final decision for the loan.
To check your monthly installment of loan online, visit https://www.applykaroo.com/emi-calculator.
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