If you are planning to purchase a big-ticket item such as a house or a car, the best way to do so is by taking a loan. Since it is a big investment, it is crucial to calculate your EMIs beforehand and to ensure that it will not put a dent in your finances.
This is where EMI and Interest Calculators come in handy. With these calculators, you can accurately estimate your monthly payments, the interest you will have to pay over the loan tenure, and how long it will take to pay off the loan. In this article, we will guide you on how to maximize your savings with EMI and Interest Calculators.
What is an EMI Calculator?
EMI or Equated Monthly Installment is the amount that you have to pay every month, including principal and interest, until the loan is repaid in full. An EMI Calculator is an online tool that helps you calculate your monthly payments based on the loan amount, interest rate, and tenure. It is a quick and easy way to estimate how much you have to pay every month and choose the loan tenure that best suits your financial situation.
How to Use an EMI Calculator?
Using an EMI Calculator is super easy. All you have to do is the following:
Step 1: Go to any online EMI Calculator that you prefer.
Step 2: Enter the loan amount that you need, the interest rate, and the loan tenure.
Step 3: Click on the “Calculate” button.
Step 4: The EMI Calculator will calculate your monthly payments, the total interest you will have to pay, and the total amount payable. It will also display the amortization schedule for the entire loan tenure.
How to Maximize your Savings with an EMI Calculator?
- Compare Loan Offers:
Before applying for a loan, it is essential to compare offers from different banks and financial institutions. Use the EMI Calculator to calculate your monthly payments for each offer and choose the one that has the lowest EMI.
2. Choose the Right Tenure:
Choosing the right loan tenure is crucial in minimizing your EMI and maximizing your savings. With the EMI Calculator, you can experiment with different loan tenures and see how it impacts your monthly payments and the total interest payable.
3. Make Prepayments:
Prepaying your loan amount is an excellent way to reduce your interest burden and shorten your loan tenure. With the EMI Calculator, you can calculate how much you can save by making prepayments and adjust your monthly payments accordingly.
What is an Interest Calculator?
An Interest Calculator is an online tool that helps you calculate the interest you will have to pay over the loan tenure. It takes into account the loan amount, interest rate, and tenure to give you an accurate estimate of the total interest payable.
How to Use an Interest Calculator?
Using an Interest Calculator is similar to using an EMI Calculator. Here are the steps:
Step 1: Go to any online Interest Calculator that you prefer.
Step 2: Enter the loan amount, the interest rate, and the loan tenure.
Step 3: Click on the “Calculate” button.
Step 4: The Interest Calculator will calculate the total interest payable over the loan tenure.
How to Maximize your Savings with an Interest Calculator?
- Negotiate the Interest Rate:
By negotiating the interest rate with the lender, you can lower your interest expense and maximize your savings. You can use the Interest Calculator to calculate the difference in total interest payable for different interest rates and choose the one that offers the best deal.
2. Opt for Shorter Tenure:
Choosing a shorter loan tenure will help you minimize your interest expense and save money in the long run. With the Interest Calculator, you can calculate the interest payable for different loan tenures and choose the one that gives you the maximum savings.
3. Make Part-Payments:
Making part-payments is an excellent way to reduce your interest expense and pay off your loan faster. With the Interest Calculator, you can calculate the difference in total interest payable for different part-payment amounts and choose the one that gives you the maximum savings.
Conclusion
Using EMI and Interest Calculators is the best way to ensure that you do not overcommit yourself financially and maximize your savings. By comparing loan offers, choosing the right tenure, negotiating the interest rate, and making prepayments/part-payments, you can minimize your monthly payments, reduce your interest expense, and pay off your loan faster. So, the next time you plan to take a loan, make sure to use an EMI or Interest Calculator and make an informed decision.
