ALL >> Investing---Finance >> View Article
How Does A Loan Emi Calculator Work?
"With the digital revolution in banking, each lender has their own websites with exhaustive content for their customers. Whether it is informative posts about their products, or blogs about finance and banking, major banks are going the next step to woo their customers. One of the most important tools that banks provide to their customers online is a loan EMI calculator.
A loan EMI calculator is a calculator that shows the monthly installment amount based on certain loan parameters. The loan parameters that an EMI calculator requires are:
• Principal outstanding
• Rate of Interest
• Loan tenure in years or months
Once these details are input in the loan calculator and submitted, the calculator shows the EMI amount for the duration of the loan. Some EMI calculators also show the break up between principal repayment and the interest payment in each installment. Now, there’s no need to wait till the loan has been sanctioned to check the amortisation schedule. It is already available in a few EMI calculators on the internet. Another important point to remember is that these loan calculators ...
... are completely free of charge and are available for everyone who visits the bank website, whether they are the bank’s customers or not.
But how do these loan eligibility calculators work? These loan calculators work on the basis of a simple formula:
P x R x [ (1+ R)^ N] / [ (1+ R) ^ N-1]
Where:
P= Principal or loan amount
R= Rate of Interest on loan
N=Tenure of loan in years
The EMI amount depends on the rate of interest and the tenure. A loan EMI calculator can be used to find out which lender’s loan offer is the best and which combination of loan tenure and rate of interest leads to the least amount of interest being paid out.
Some home loan eligibility calculators also require the customer to put in monthly or yearly income details as well as the age. The calculator uses this to automatically calculate the amount of loan that the applicant would be eligible for. When it comes to loans for two wheelers or three wheelers, some loan EMI calculators require the model number and the company name so that the value of the loan can be decided based on the price of the vehicle being purchased. Once all these details have been fed into the loan eligibility calculator, it calculates the loan amount that the customer is eligible for and redirects the customer to fill up a form to request a call back from the bank’s customer representatives.
Author Bio:- Neha Sharma is a finance student who loves to write in her free time. She has spent considerable time researching about loan EMI calculator. Through her work, she explains how it works
Add Comment
Investing / Finance Articles
1. Chart Patterns For Effective IntradayAuthor: strike
2. Analysis Of Bank Statements: Essential For Banks And Nbfcs
Author: Aakash Parikh
3. Essential Tips For Buying Crypto Miners: Make Informed Decisions
Author: blockdag
4. Everything You Need To Know About Applying For A Swift Funds Loan
Author: Sofia Alice
5. Finding The Right Mortgage Broker In Abbotsford And Surrey, Bc
Author: Satbir Bhullar Mortgages
6. Jaydeep La Residency Thane Kolshet Road Project 2 & 3 Bhk Flats
Author: akhilagardas
7. Embracing Sustainable Investment With Esg Data & Solutions
Author: By Inrate Team
8. The Importance Of Lead Qualification In Solar Appointment Generation
Author: Shan Tait
9. Setting Up Your Company In Ireland: Key Considerations For Successful Formation
Author: LSC and Partners - Corporate Tax Consultancy LSC
10. Mortgage Lenders edmonton – How Are They Going To Help You
Author: Dominion Lending Centres Ratefair
11. Why Managing An Smsf In Perth Can Maximize Your Retirement Potential?
Author: Daniel Stewart
12. The Future Of Cryptocurrencies: A Look Ahead
Author: Ethan
13. Unlocking The Power Of Biodiversity In Data Solutions & Rating Services
Author: By Inrate Team
14. The Role Of Chartered Tax Advisors: Ensuring Compliance And Maximizing Benefits
Author: Business Tax & Money House
15. Innovative Accounting Solutions For Modern Businesses
Author: Business Tax & Money House