Financial institutions offer multiple financing options to fund your personal and professional needs. Loan options cover everything from funding your higher education, planning your destination wedding, and upgrading your business machinery. However, you need to repay the borrowed loan amount in terms of EMIs in a specific time frame. That is where a loan calculator or a finance calculator comes in handy. It lifts the heavy burden of tedious EMI and loan eligibility calculations for you with its unique features.
By doing so, it becomes your faithful partner in wise budget planning. That’s not all. It does more than you can imagine. Here are seven things you must note about the loan calculator.
Shows Your Loan Eligibility:
Checking your loan eligibility before applying becomes crucial, whether a personal loan or any other loan. The finance calculator aids you in understanding your loan eligibility for every other loan. In short, it gives you a crystal-clear view of the loan amount estimates you can opt for. To do so, the calculator asks you below details:
- Date of birth
- Monthly income
- Loan repayment tenure
- Your other income sources
- Any other financial liabilities like car loans, other debts, etc
Analyzing your loan eligibility gives you a green signal for further loan procedure formalities.
Calculates Accurate Monthly Payable EMIs:
Along with showing your loan eligibility, the powerful tool also gives monthly payable EMI estimates on the selected loan amount. For doing so, it uses the below formula:
EMI= P*R*(1+R) ^N/[(1+R) ^N-1]
Here, P is your principal loan amount
R is the rate of interest (Per month)
N is the loan tenure
By entering the P, N, and R values, you get accurate EMI estimates on your loan amount. Thus, it stops your complex manual excel sheet calculations, saves you valuable time, and financially prepares you in advance for regular EMI payments.
Compares Multiple Loan Plans:
The calculator’s most valuable feature is that you can utilize them endlessly. For instance, when applying for a personal loan, you can compare multiple loan options from different lenders. Wondering how? You can enter varying loan amounts, interest rates, and tenures other lenders offer. You get EMI estimates per the respective P, N, and R values you enter. Thus, adjusting variables allows you to compare various loan plans. Lastly, it helps you make an informed decision regarding choosing the best lender with a suitable method. The best part is you can take these multiple revisions free of cost.
Provide Interest Outgo Details:
You might want to extend your loan tenure to become stress-free of heavy EMI burdens. But, you may need to pay more interest than you should ideally pay. The finance calculator provides vital details on the total interest outgo for different loan tenures you enter. Simply put, it helps you analyze the heavy interest cost you will bear by loan tenure extension. Lastly, a detailed analysis of this scenario enables you to select a suitable loan tenure.
Shows Amortization Schedule:
The finance calculator also shows you the amortization schedule for your payments. The amortization schedule records your loan payments, including your monthly principal amount and interest rates deductible. A closer look at this schedule allows you to plan for loan pre-pay or loan pre-closure in the future. However, before opting for loan pre-closure, you must verify any pre-closure penalties specified by lenders.
It Gives You Better Insights with Visual Details:
The finance calculators provide numerical estimates of required fields and visual representations of complete outstanding. It includes graphic pictures, tables, pie charts, etc. As visuals speak louder than words. As a result, you get a core understanding of critical details. Thus, it makes the base of your financial planning solid and robust.
Available on Every Lender’s Website:
The finance calculators are available on every lender’s official website. So, now you can get your calculations done on the go. The best part is that you can use this free, easy-to-use tool 24*7 without entering too many personal details.
The loan calculator offers an intelligent avenue for efficient budget planning. It prepares you mentally and financially well in advance for loan planning. By providing accurate EMI, loan eligibility, interest outgo, etc., estimates, the loan calculator triggers correct financial steps in the first place. As a result, well-planned finance planning ensures your positive credit history, which benefits you in the long run.