EMI calculators are digital tools used by borrowers to estimate their EMI payment obligations before applying for a new loan. These calculators use loan amount, interest rate, and tenure details to compute your tentative monthly repayments. Estimating EMIs beforehand helps you plan your loan better and avoid overextending yourself.
Given the growing demand for loans, there is no dearth of EMI calculators online. You will find numerous EMI calculators from leading NBFCs, banks, and aggregator sites online. However, the real question is how to choose the best EMI calculator? To locate the best, you can look for the six key features we’ve covered in this article.
Six features you should look for in an EMI calculator
If you wish to simplify the loan planning process, look for an EMI calculator with the six following features:
- A simple and user-friendly interface
Any good EMI calculator must have a simple and user-friendly design to ensure everyone is easily able to use it. Look for an EMI calculator with clearly labelled input fields where you can enter the loan amount, tenure, and interest rate details. Some calculators have sliding scales that make the input process easier, ensuring better convenience. Picking a calculator with a simplified UI will make calculating EMIs as easy as shopping at an online marketplace.
- Offers an amortisation schedule
A certain portion of every EMI payment you make is used for principal repayment, while the rest is used to pay the interest accrued. While your EMIs may remain constant throughout the repayment tenure (if you have obtained the loan against a fixed rate of interest), the amount used to repay principal and interest balances changes. This is summed up by a loan amortisation schedule. A good EMI calculator will let you access the amortisation schedule for your loan the moment you run a simulation. This schedule clearly displays how your EMI payments are broken down to pay the principal and interest amounts on a yearly/monthly basis, allowing you access to a completely transparent payment schedule.
- Lists a prepayment option
Making part or full prepayments on a loan can help you become debt-free faster as well as save on interest payments. The prepaid amount is used to reduce the outstanding principal. However, since the interest is calculated on your outstanding balance, prepaying loans helps lower your interest burden as well. If you plan on using annual bonuses, tax refunds, and other windfalls to prepay your loan, look for an EMI calculator that lists this feature. EMI calculators with the prepayment option allow you to see how your prepayment will impact the loan EMI amount.
- Supports multiple loan types
The best EMI calculators offer a comprehensive approach to loan planning by allowing users to compute EMIs for various loans. These tools come with integrated features that help you select the ideal loan type and then proceed to calculating EMIs for the same. Having access to personal, home, and business loan EMI calculators in a single tool makes it easier to plan your finances, especially when you wish to obtain multiple loans.
- Customisation options
Customisation is a key characteristic you must look for in an EMI calculator. Choose EMI calculators that let you run multiple simulations with varying loan amount, tenure, and interest rate details. Calculators that offer this flexibility of adjustment make comparing different loan offers easier. For instance, if you have shortlisted two NBFCs for a personal loan, you can leverage this feature to modify the interest rate field and compare the two lender offers to see which one fits your budget. In short, the customisation feature must be able to help you understand your options better.
- Offers graphical representations
Some advanced EMI calculators also offer graphical representation of data. These calculators represent the total loan amount and total interest value as pie charts or graphs to help the user understand the output better. Since graphical representation helps people understand mathematical data better, you can use these calculators to simplify EMI planning.
Conclusion
Choosing an EMI calculator with the features listed above can help you streamline the loan planning process. Features like a simple and user-friendly UI, customisation possibility, amortisation schedules, and graphical representation of results can make calculating EMIs easier. Additional features like prepayment considerations and multiple loan option toggles can help you make informed borrowing decisions based on comprehensive data.
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