Why using EMI calculator is important before applying for personal
canada goose coats on sale With the cost of living in the 21st century reaching sky high, loans have become an integral part of our livelihood. Every time we fall short of finances in meeting our financial needs we look up to banks and financial institutions to help bridge the gap between the requirement and the availability of the finances at our disposal. With loans, we can even meet the financial goals which might seem impossible to achieve otherwise. There are several scenarios in which one asks for a loan like to fund their child’s education, to get married, to renovate or buy a dream home, to buy a new car or to meet some upcoming important expenses at the personal front. No matter what your need be, you will find a loan catering to your specific requirement. canada goose coats on sale
However, applying for a loan and getting it is not the end of the story, there are some significant terms and implications that you must understand when you apply for a personal loan.
Equated Monthly Installments or EMI’s is one such term that you would come across often when applying for personal loans of any kind. To canada goose outlet explain in simple terms, EMI is a stipulated amount that you will be paying on monthly basis for the repayment of your loan. You can pay your EMI either through the auto debit instruction which you can easily set up on your bank account or through the borrower cheque which you need to send every month without fail. In both the scenario’s the amount you will be paying will remain same along with the tenure for which you need to keep paying the EMI.
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When it comes to calculating EMI there are 3 important factors that one must take in consideration:
canada goose uk black friday The Loan Amount Your loan amount is basically the total amount that you have borrowed. Many a times, the borrower is sanctioned a larger loan amount but their EMI will be calculated on the amount they have actually borrowed and not on the total amount they have been sanctioned. canada goose uk black friday
Interest Rate The personal loan interest rate is something that you will be charged by the bank or any lending institution that you might canada goose outlet paypal have approached for loan. The personal loan rates are calculated on the reducing balance for the total canada goose outlet online reviews sum lent.
The Tenure of Loan Your loan tenure s the entire period for which you take borrowed the loan. On the basis of the tenure only your EMI will be calculated. Your loan tenure is also actually the number of EMIs you will have to pay for repayment of loan.
EMI Calculation Formula
Canada Goose Coats On Sale EMI = P r (1+r)n / (1+r)(n 1)P = Principal or Amount borrowed, R = Rate of interest per annum, N = number of installments. Canada Goose Coats On Sale
However, the evolving technology has simplified the EMI calculations with easy availability of online EMI calculators and you no longer need to calculate the EMIs canada goose outlet london manually. There are numerous loan EMI calculators available online that you can use to instantly get the amount you will need to pay every month basis your loan amount, interest rate and tenure.
To put things simply for your understanding, your loan EMI will remain canada goose outlet reviews directly proportional to the interest rates you are offered and the principal amount that you have canada goose outlet mall borrowed, but it will remain inversely proportional to your loan tenure. The higher the loan amount or interest rate the higher will be your EMI, but if you opt for a longer tenure, your EMI will be reduced significantly.
canada goose factory sale Let’s Understand The Calculation With an Example: canada goose factory sale
canada goose store Supposedly, XYZ has applied for the personal loan of Rs. 1,00,000 and the interest rate they have been offered by their bank is 12% for 12 months. In this case, their monthly EMI will be Rs. 8884/. However, if the loan canada goose outlet orlando amount and tenure remains the same but the interest charged is 15%, the EMI will be Rs. 9025/, whereas the same amount and same interest for a longer tenure, say 36 months, would make monthly EMI of Rs. 3321/. If the loan amount is Rs.2,00,000 with 12% interest rate and 12 canada goose outlet 2015 month tenure, the monthly equated installment will be of Rs. 17,769/. canada goose store
Why Using a Loan Eligibility Calculator Is Important?
People get extremely excited with the prospect of getting financed and start planning out the ways in which they will make use of that money. But, one thing which they completely overlook here is their debt repayment perspective. Understanding your EMIs and your loan eligibility beforehand allows canada goose outlet in uk you to plan your budget and monthly expenses accordingly, so that you will not miss out on your loan repayment.
To help you get through this, there are several websites that provide free tools like loan eligibility calculator and loan EMI calculator that let you know the amount of EMI that you would have to pay every month once you get your loan disbursed. People who calculate their EMIs before applying for loan prepare themselves beforehand and also understand how their life and canada goose outlet store near me expenses will be modified once the EMI schedule will begin. Those who do not plan in advance for debt repayment often end up missing the EMIs, which leads to poor credit score.
cheap Canada Goose Also, loan EMI calculators give you freedom to compare EMI and interest rates of different financial institutions that lend money. Checking eligibility through EMI calculator tools can also help in getting better deals for your personal loan. cheap Canada Goose
buy canada goose jacket Your EMIs are calculated in such a fashion that you end up paying a certain amount of your loan and interest every month. The initial phase of your loan EMI is dedicated to the repayment of the interest and thereafter you start paying the principal amount, which is most cases comes after paying almost half of your total installments. buy canada goose jacket
After the loan is processed you will be given an Amortization Schedule. It will give you the break up of your EMIs into the interest amount and the principal component divided month on month basis. Though most of the banks and financial institutions share amortization schedule, in case you haven’t received you can ask for the same or you can getcanadagooseoutlet.com also check it online using the online interest calculator tools. Your amortization schedule is an important document which you must check before signing on the dotted line for final disbursal.
Why Your EMI May Change Over Time
Though it is not necessary that your EMI will change after a certain point of time, but if there is any change in the basics of the loan EMI calculation, then your EMI might change. The scenarios in which the EMI may change include:
canada goose Prepayment of Loan: Here if the borrower prepays the loan amount, their principal amount will come down and also there will be a marginal change in interest calculated, which will bring down the EMI. canada goose
Change In Interest Rate: If you taken loan on flexible interest rate then your EMI will fluctuate as per the change in interest rate. You not only get to check your affordability to apply for loan, but you also get to know the repayment schedule in advance so that you can plan your finances accordingly to avoid poor credit score.
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