An EMI Calculator is the simplest instrument which enables one to compute as to how much one needs to pay towards his mortgage repayment at the end of every month. It shows you the a variety of options of repayment of your loan with a simplified table doing necessary calculations taking into input the sum of loan and the rate of interest and the term of repayment.
The EMI which is also known as The Equated Monthly Instalment calculator serves an individual with a variety of information relating to sum of money that a person has to repay at the maturity of his mortgage loan.
There are fundamentally three most important inputs related to an EMI calculator. Which are the sum of loan, the rate of interest and the term within which the amount of loan is to be repaid.
It represents the sum total of the loan money that one has borrowed from any person offering such loans in the marketplace. Such lenders may in the form of the banks or any of the financial institution which has a legal authority granted by the government to lend the money to the potential borrowers. The amount of loan is for the quantity which the individual is interested in getting financed. However the amount of loan borrowed may or may not be equal to the value of the article which is to be financed. Generally a fraction of the whole of the cost is paid at the time when the article is released and the left over amount of the article to be paid is the amount of amount which is to be paid later.
This is a rate of interest which is being charged upon the total amount of loan. This rate is different, depending upon the period for which the loan amount is borrowed by the individual. If the period for which the loan is taken is long, then the rate of interest will be lower as compared to a short duration loan period. The rate of interest charged is distinct by the various companies and distinct banks and the borrower prefers the most competitive rates.
Tenure refers to the period within which one has to repay the amount of loan borrowed by him. This word tenure generally includes a number of years. Larger the tenure of repayment, lesser is the rate of interest charged on the amount of loan. This period of repayment should be selected by any person by properly analysing the monetary position of the individual and this tenure of repayment should be selected in such a way that it need not become a burden on the individual.
Hence EMI calculators help the individual to calculate the repayment amount accurately and easily and quickly. Thus the individual is benefited indirectly in many ways. Under this calculations are done only on cost basis but this cannot be used for calculating the processing cost as only the cost is considered but still it benefits an individual in many ways.