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EMI Calculator: A Tool to Ensure Accurate Loan EMI Calculation

· emi calculator,Personal Loan,EMI Calculation
EMI Calculation

EMI calculator is a financial tool available online for loan instalment estimation. Its use extends to the computation of a near-accurate EMI amount the borrower has to pay on the loan availed. The personal loan calculator works on the basic principle of interest calculation. Potential borrowers need to understand both - the calculator’s working as well as the formula on which it functions.

Formula to calculate EMI

The basic formula for calculation of EMI on advances like a personal loan is explained below –

E = P X R X (1 + R) ^n / [(1 + R) ^n-1]

In this given formula,

E stands for EMI,

P denotes the principal amount,

R is the rate of interest, and

n is the number of months as per the repayment tenor.

Uses of an EMI calculator

An instalment calculator can have quite a few applications. Check out its two primary uses below.

  • Comparing different loan offers: It is essential to compare different loan offers from various financial institutions to arrive at the most beneficial one. It can be done using an online calculator which offers near-accurate calculation of EMIs in an instant.

  • Choosing the right tenor: Online calculators also allow individuals to compare different tenors for the same loan amount. It enables them to select a convenient tenor so that they make affordable repayments and in time.

Though its use is simple, potential borrowers can learn how they can use a personal loan calculator to derive maximum utility. Usually, they can access it online, and input the interest, tenor and loan amount to find the EMI amount.

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