There is no denying that buying online has become very commonplace.
We buy many things. It is not that we need them always. We also buy items to display our wealth and social standing. Being social animals, we are always under tremendous pressure to be at par with others if we cannot exceed them.
If you are not a billionaire, you are sure to have some desires unfulfilled for lack of funds. Taking a loan is the only way you out in such situations. But, before you take a step forward, you must have a clear understanding of how much you have to pay every month.
EMI calculator excel is convenient for this. Loaded with the formula of calculating monthly installments, it clears your dilemma and helps to take loan decision. Check to know the reasons for using this.
Reasons for using EMI calculators
1. It helps to plan finances
Prospect of getting a loan makes people feel relieved as they will be able to fulfill their desire. They become so excited that they start planning how to use the amount. Here lies the risk. If the monthly installment is very high, it affects your budget.
In extreme cases, it may so happen that you fail to pay the monthly installments. This is a dangerous situation. As the banks penalize the defaulter and you have to pay more. It also affects your credit score. The EMI calculator lets you know everything beforehand so that you can manage your finances in a better way.
2. It gives you easy access
You can access the calculator anytime and from anywhere. Moreover, you can use the online calculator as many times as you require for figuring out the best proposal.
3. It is very convenient to use
The banks and financial institutions have online EMI calculators. This is an excellent tool. It contains field like the type of loan, amount of credit required, rate of interest, and tenure of the loan. You are to fill these. The tool will immediately revert with every detail. So, you are in an advantageous position and can decide about your loan proposal.
4. It is fast and accurate
You can, of course, calculate equated monthly installments manually with a pen and paper. As the formula is a bit complex, it will take hours before you can find out the best loan proposal. Moreover, there is every chance that you will make some mistakes.
With an online EMI calculator, you do not face such problems. It can perform calculations with 100% accuracy at the click of your mouse. So you can vary the parameters to find the best proposal without any problem.
5. It gives you loan-specific information
In most of the cases, people ask for
Home loan
Car loan
Personal loan
Education loan
The most excellent plus point an online EMI calculator is that it has provisions for these types. You will only have to click the mouse on the right type, fill-up required fields. The tool will give you information for the type you have selected. So, you can have exact details about each type of loan separately.
6. It guides you with a pictorial input
Knowing where you stand is vital when you take a loan for financial assistance. Other than calculating the monthly installments, the tool also gives a graphical representation. It covers everything, including outstanding principal, rate of interest, and time remaining. As you know how the loan will progress over time, you can make the most appropriate financial decision.
FAQs
Can I use the same calculator for all types of loans?
Yes. You can do that in most of the cases. A problem may arise when there is a restriction on loan amount,
Which one is better; calculator or excel sheet?
A calculator is a ready-to-use tool. For an excel sheet, you may have to program it. This makes the calculator a better choice.
How do EMI calculators work?
Online EMI calculators work based on several inputs: type of loan, the loan amount, tenure, and rate of interest. You can get the final results almost immediately by using this tool
Will the bank ask to pay the same installment?
The exact amount of installment may differ slightly due to changes in the rate of interest and other charges at the time of actual sanctioning.
Is pre-closing a better option?
Pre-closing the loan may negatively affect your credit score. It is better to repay a part of the loan. This will reduce the tenure, and you will pay less interest.
Conclusion
Using this tool, you can quickly know your eligibility, affordability, repayment schedule, etc. for any loan. As you will be able to know everything in advance, you will be able to plan your budget accordingly. This ultimately helps to improve your credit score.