EMI Calculator

EMI Scenarios

Defining an EMI

• It is a fixed amount made by the borrower to the lender at a particular date every month.
• It depends on various multiple factors such as
  1. The Principal borrowed
  2. The Rate of interest
  3. The Tenure of the Loan
  4. The Monthly Annual Resting period

Understanding the EMI

• EMI plans differ from the variable payment plans. In the variable payment, the borrowers pay higher amounts at his discretion.
• However, EMI’S are different from the variable payment plans. The borrowers only pay a fixed amount each month.
• EMI’s are in a way beneficial as the amounts are fixed so it becomes easy for personal budgeting purposes also.

Calculation of EMI

The EMI calculator is an online tool, which calculates your total EMI.

It is extremely easy to use and all you have to do is enter only the amount, tenure and the rate of interest.

There are two ways to calculate the EMI’s, the flat rate method or the reducing balance method.

The calculation is based on summing the principal loan amount and the interest on the principle. It is divided by the number of months.

The Flat Rate Method

An investor takes a mortgage of Rs 5, 00,000 which is the principal amount along with an interest rate of 3.50 % for a period of 10 years.

So in this case the EMI total amount would be Rs 5625.(Rs 5,00,000+ Rs 5,00,000*10*0.35)/ 10*12.

Note that in the flat rate calculation the principal amount remains the same.

EMI Reduction Balance Method

In this method, the borrowers pay off the monthly balance which reduces the principle and so the EMI balance method is more feasible. It is also more cost-friendly in the long term for the borrowers. So by the above formula, the EMI will come to Rs 1549.

The standard formula for calculating EMI is [P*R*(1+R) N]/[(1+R) N-1]

Where P stands for the loan amount, R is the rate of interest, and N is the number of monthly instalments.

It is important to understand how an EMI works as you require taking loans at some of the other time in your life for important purposes such as education, marriage or for buying a house.

The important point to note is that the loans can be availed for different purposes but the various elements on which the loan is calculated remains the same, which is typically the loan amount, the tenure and the interest rates.

How Can You Reduce your Personal Loan’s EMI

Taking a loan is like investing your life savings, so the decisions taken should be an extremely calculated one, after knowing all the facts and your repayment capacity. Ignorance on your part can mar the chances of a healthy financial funnel.

• There is an option of longer repayment tenure. So preferably opt for the same
• Negotiate with your loan provider for a lower rate of interest
• Research, ask and enquire for the best deals around
• Have a look at what is your repaying capacity and then decide on the best deals
• Also, take note of the prevailing interest rates and improve your credit score few years before you plan to go for a loan. Even two to three credit score changes can help you improve your interest rate dramatically

HOW TO USE THE OROWEALTH EMI CALCULATOR?

The EMI calculator for Home, Car and Personal Loan in India.

Use the ORO EMI calculator which you need to pay on the outstanding loans. You also have the option of the principle outstanding after the completion of the tenure.

The EMI Calculator is as follows-

• The EMI CALCULATOR
• Principle Outstanding

Enter the Loan amount, Tenure and Annual Rate of Interest. Press Calculate to know your EMI. You can reset all the information as well.