It is very important to calculate the EMI before you apply for a loan. Thanks to the online EMI Loan Calculator, you can now accurately calculate the EMI easily without any complications. We’ve created a list of five tips to help you make the best use of such calculators.
The EMI is one of the most important considerations for any loan borrower. The person planning to take a loan should make sure that he/she would be able to easily afford the EMIs on a regular basis to avoid skipping payments and pay the penalty for the same. Thus, it is better to calculate the EMI as per the loan amount, tenure, and interest rate even before applying for the loan.
Thanks to the modern technologies, you can now calculate the EMI online easily with the help of EMI calculators. If you want to use one such calculator, remember the tips mentioned below to make the best use of this online tool.
- Adjust the Loan Tenure to Reach an Affordable EMI Amount
An EMI Loan Calculator requires you to enter the loan amount, interest rate, and loan tenure to calculate the EMI. While you cannot do much about the money that you need to borrow, and interest charged by the lender, you can adjust the loan tenure to reach an affordable EMI amount.
Depending on the type of loan you are looking for, there will surely be a maximum loan tenure, but you can still adjust the tenure between the minimum and maximum limit to ensure that the EMI amount is affordable.
- Calculate EMI if you do not Entirely Fit the Eligibility Criteria
Lenders in India have their own eligibility requirements on the basis of which they accept or reject loan applications. Factors like your salary, credit score, age, and existing loans are commonly considered by the all the lenders. In case if you do not entirely fit the eligibility criteria, there are chances that your loan would be approved, but at a slightly higher interest rate.
You can adjust the rate of interest part of the loan calculator to know how much you’d be required to pay every month at different interest rates.
- Calculate EMI of Floating Interest Rate Loans
While calculating the EMI of a loan taken at a fixed interest rate is easy, things can get a little confusing if you are to take a loan on variable/floating interest rate. For this, you can consider two extreme scenarios, inflation and deflation, which can increase or decrease the rate of interest.
For the inflationary scenario, increase the current rate of interest by 1%-3% and do the opposite for the deflationary scenario. This would help you reach the right EMI amount no matter if the interest rate increases or decreases in future.
- Know what the Lender Offers
Many of the lenders now have EMI calculators on their website. While you can always know the different type of loan products offered by the lender, maximum/minimum loan amount, the interest rate charged and loan tenure by going through the website, the online calculator is a simpler alternative.
The minimum and maximum limits set on the calculator for the loan amount, interest rate, and loan tenure are what the lender would ultimately offer. This makes it easier and quicker for you to select a lender that suits your requirement. For instance, if a lender charges a minimum of 12% interest on a personal loan, and you are looking for something around 10%-11%, you can look for another lender.
- Apply Online after Calculating
Once you’ve selected a lender and calculated the EMI, the next step would be to apply for the loan. Most of the lenders in India now allow borrowers to apply for the loan online. The calculators offered by the lenders usually have instructions and call-to-action button with the help of which you can begin the application process.
Rather than applying for a loan and then knowing that you wouldn’t be able to afford the EMI, it is better to calculate the EMI first before applying to save your efforts and time.
Remember these tips if you want to use an online EMI calculator to take the best advantage of this handy tool. Remember that the calculations are just approximate values, and you’d only be able to know the exact EMI amount once you apply for the loan.