What is EMI?
EMI means Easy Monthly Instalment and it gives us the flexibility to make a big purchase, such as buying your own property or you want lump sum amount to buy a car or any other personal needs; the respective loan will ease your problem significantly.
You only have to pay a fixed amount payable every month to your bank or any other financial institution until the loan amount is fully paid off. The monthly amount you pay will consist of the interest on loan as well as part of the principal amount to be repaid.
Using EMI Calculator
Generally, it happens when the time comes to repay the loan amount, most people feel that their bank is charging way too much interest!!
And, it is not the case!
This is the reason why you should always be equipped with the right information at the right time. Before you go ahead to take any loan, make use of this calculator to know your monthly EMI amount.
Most of us take loans in the following cases:
- To buy own home in the location of your choice.
- To buy a car of your choice.
- Education loan
- Any other personal need such as vacation trip to abroad, maintenance repair of your home or even medical emergency, in such cases you can utilize personal loans.
For education planning purposes, you can use this education planning calculator.
Now let’s take below 2 illustrations as an example on how you can use this EMI Calculator most effectively.
EMI Calculation Illustrations
#1 Home Loan
Let’s say you need Rs 1 crore to purchase your new home in Chennai. Your bank is charging the rate of interest of 8% in the home loan and you chose the duration of 10 years for repayment.
Now putting all these values (Rs 1 crore, 8% and 10 years) in the calculator, you will get:
Your monthly loan EMI will be Rs 1,21,328 for the next 10 years.
The total amount you have to repay to your bank is Rs 1,45,59,360 for your original principal sum of Rs 1 crore. This means you are paying Rs 45,59,360 as interest over your principal amount.
#2 Personal Loan
Let’s say you need Rs 10 Lacs for your vacations in Europe with your family; you have applied for a personal loan and got it from your bank with the interest rate of 15%. Now, you want to repay it back in next 10 years through EMI.
Simply put these values in the calculator, you will find that you need to pay the EMI of Rs 16,133 per month.
The total amount you have to repay your bank is Rs 19,35,960 for your original principal sum of Rs 10,00,000. This means you are paying Rs 9,35,960 as interest over your principal amount.
In this way, you can calculate your EMI amount customized with your needs, whether it is a personal loan, car loan, education loan or home loan.