Equated Monthly Instalment (EMI) calculators are extremely helpful tools. An EMI calculator helped Harish pay back his personal loan. It also ensured that he would not stretch his finances. He was wise enough to use an online EMI calculator before opting for a loan. When he saw the EMI he had to pay, he reworked the numbers. He then took a smaller loan. Harish is now paying this back with ease today.
But, you must know how EMI calculators work to get the most out of them. Take a look at the tips mentioned below to get a clearer picture.
Tips to remember before using an EMI calculator
The right information: To get the correct result, you have to feed in the correct data. So, be truthful while filling in the form. Mention the correct loan amount, the loan tenure, and so on. You will get a good estimate of the EMI that you need to pay each month. If you fill in the wrong information, the results will not be correct. This could lead to confusion and financial trouble later.
Loan-specific: EMI calculators work for individual loans. So, use the calculator yourself before applying for the loan. You should not rely on the results your friend got, even if the loan was a similar one. This can help you get the exact information you need.
Different banks/NBFCs have different rates: Interest rates and other fees differ from one financial institution to the next. So, the results flashed on the EMI calculator will vary as well. Loan providers will not always offer the same rates and benefits. So, do not expect the calculator to give you a uniform result for all personal loans.
Calculator v/s simulator: Be very careful when using an online EMI calculator. Some websites do not offer a calculator. Some offer an EMI simulator. This only gives you an approximate idea of the EMI structure. But remember, calculators tend to be more accurate.
Cross-check results: Use at least two EMI calculators. This way, you can cross-check the results. Most calculators available online offer accurate results. But, there is no harm in getting the results verified, so that you know they are correct. Besides, the calculators work fast. Using two of them will not take up a lot of your time.
The bottom line
EMI calculators help you chalk out a financial plan after taking the EMI and your other expenses into account. Some of them are also available in the form of smartphone apps. You can access these at all times. So, make sure you use this wonderful tool before you take a personal loan. You can find out about your loan eligibility and your repayment structure all in one go and avoid any nasty shocks later.