When you apply for a loan, it is very important to know how much it will cost you in the long run. This is where an online loan calculator comes in extremely handy. The most tedious job of availing a loan is to calculate its interest rate, tenor, and EMI. But now with the bank loan calculator, you no longer have to spend a lot of time calculating and figuring out about the amortization details. You can calculate the details at the comfort of your home and its easy UI comes without any jargon. Here is an overview of the loan calculator, and how it can help you get the loan that suits your financial condition.
Overview of Loan Calculator
An online loan calculator will help you get all the amortization details such as loan tenor, interest rate, and EMI. These are crucial details when it comes to availing the loan as a right loan plan will keep your financial stability intact. But these can take a long time if done manually. But a bank loan calculator can help you get these details in a second. This will help you save a lot of time and hassle of visiting the bank representative to inquire about the amortization details. All you have to do is enter some basic information in the bank loan calculator related to the loan such as loan amount, tenor, and interest rate. The bank loan interest calculator takes in all these details and displays the EMI in a second.
Loan amount is also known as the principal amount and is the amount of you wish to borrow. There is different types of loan interest rate for example- home loan interest rate, personal loan interest rate, car loan interest rate. You should decide loan amount according to interest rate. Therefore, you need to make sure to borrow only as much as you can repay. An online loan calculator will aid you in determining your repayment capacity. Choose a loan amount that meets your financial needs and help you maintain your financial stability. You can avoid defaulting your loan by keeping a low debt-to-income ratio.
This calculator also works as a loan tenor calculator. Loan tenor is the time you get to repay the loan. Loan tenor depends on the lender and the type of loan you wish to apply for. As long as you adhere to the limit, you have the freedom to choose your tenor. Choose the tenor wisely as it has a direct impact on the EMI. A longer loan tenor means a lower EMI but a higher interest payment. On the other hand, a short tenor means a higher EMI but a lower interest payment. So enter the tenor on the loan calculator that suits your needs the best.
As the name suggests, it is the interest charged on the loan amount. it is directly proportional to the EMI. You will see that if you input a low rate into the bank loan interest calculator; you will have to pay a lower EMI. Higher interest rates attract high monthly payments. Majority of the times, this rate stays the same throughout your tenor (also known as fixed type). So you are required to pay the same EMI throughout your repayment period. If you choose a floating type, your interest rate can vary from time to time. hence, your EMIs can vary according to the base rate in case of a floating type. A loan interest calculator will help you determine which interest rate you will be able to sustain.
a) Credit Score
The interest rate is given by the financial institution and you might be able to negotiate it to might not have a say in it. Financial institutions determine your interest are based on several factors such as your credit score and the type of loan you are applying for. They check your repayment history and give you a low-interest rate if you are not a risky borrower. If you have a bad repayment history and low credit score, this means that you are a risky borrower. Thus, your interest rate rises with this risk of lending you the money. So if you don’t have a good credit score, it will be beneficial for you if you increase your score. Pay your EMIs on time if you already have a loan. Clear your credit outstanding before the deadline diligently. This will help you get a good credit report. You can also check your credit score for free online.
b) Type of Loan
Another important factor determines your interest rate is the type of loan you choose. Secure loans have lower interest rates than unsecured ones. This is because the lender’s risk decreases if they have security with them. If you are unable to repay your loan, the lender can easily get their money back by selling the collateral. As they cannot do the same with unsecured loans, the interest rate charged is higher. Enter the interest rate into the bank loan calculator that your lender is giving you. So you can work out the tenor accordingly.
How to Calculate Monthly Loan Payment?
As stated earlier, the above-mentioned parameters, i.e., loan amount, tenor, and interest rate can be entered into the loan interest calculator to calculate the monthly loan payment. Monthly loan payment is also known as EMI or equated monthly installments. It is the amount you will have to pay to the lender at a specified date every month throughout your loan tenor or till you finish repaying your loan amount. The above parameters you enter into the loan EMI calculator has a direct effect on the monthly payment; and are thus required by the interest calculator online to calculate your EMI.
To calculate the monthly loan payment, you will simply have to enter your loan amount, tenor, and interest. The loan calculator India will then display the monthly payment in a second. You can then reset this result, and try out a different combination of these parameters until you are satisfied with the EMI you will have to pay. There will be times when you might want to lower your EMI and choose a longer tenor. You might feel that you are paying a high price and hence lower your tenor and interest. Keep changing the parameters of the loan rate calculator till you feel you will be able to afford a certain EMI for a particular tenor of your long amount and interest rate.
So with the help of this loan interest calculator India, you will be able to predict how much a loan will cost you in the future. This calculator is simple to use and is free of cost. You can use the bank loan calculator from anywhere and determine the loan plan in the convenience of your home. It would probably take hours of manual calculations to get the desired results based on different sets of parameters. You can circumvent this cumbersome task of calculation by using the calculator. A loan calculator does the job of a tenor calculator, loan amount calculator, interest rate calculator, and EMI calculator. Use it to compare different loans against set parameters and get the best! You get in touch with the financial institution’s representative once you have decided on your parameters.
What is Consumer Loan?
Consumer loan is an alternative to a credit card which provides a plan for your monthly down payments and gives security for payments. Some common types of consumer loan like- auto loans, credit cards, home mortgages, personal loans, student loans.
What is the effective annual rate?
The Effective Annual Rate (EAR) is the rate of interest which is paid on a loan or other financial products due to the result of compounding over a given time period.
How do you calculate monthly APR?
- Divide the finance charge by the loan amount
- Multiply the result by 365
- Divide the result by the term of the loan
- Multiply the result by 100