Loan EMI Calculator for Home Loan, Car Loan & Personal Loan
The ‘What’, ‘Why’, and ‘How’ of EMI Calculators
Whether it’s a car, or if it’s a house, or something more mundane, like a mobile phone; if you’ve ever bought anything a little too expensive than the amount you can easily and readily pay, you must have come across the term EMI. Especially in India, people buying online prefer to use their credit cards and go for one of the EMI schemes available. And anyone having chosen to go the EMI way must have pondered upon the extra cost they have to pay this way. What’s that about?
We’ll see it here.
Equated Monthly Installment, is the money you pay each month to either the bank or a financial institution of any other kind that you took a loan from, till you haven’t paid them back the principal loan amount plus the interest. Now, how do these big banks like HDFC, Axis, etc. calculate these monthly installments? A simple loan EMI calculator works by adding the interest to the principal amount, and dividing the sum by the total number of months you’ve chose to repay the loan in. Now, your installment for each months remains the same. But, the banks keep reducing the interest component of the EMI, allowing you to pay off more towards the principal amount, as you go on making your monthly payments. You will find that the proportion of interest and principal amount changes, as each month passes