Finding
out the monthly instalment amount for borrowed loans is one of the foremost
tasks that customers have on their mind while trying to obtain credit. Knowing
your loan EMI before or after availing loan can be a real helper with respect
to better financial planning.

Calculation
of loan instalments isn’t a simple task because of the involvement of multiple
variables. Hence, out of all the methods listed below the easiest and the
simplest way is to calculate EMI using an online

**EMI calculator**.
There are
other ways too to calculate your monthly loan EMI so as anticipate certainly
the expenditure that you would have for each month when you start repaying your
loan. This enables you to plan your savings more effectively. Listed below are
the three ways in which you can calculate your loan EMI.

**Using Online EMI Calculator**

Using an
online EMI Calculator is the easiest way to know your
loan instalment. This tool takes in certain parameters like loan amount,
interest rate, processing fee and loan tenure and process.

s this
data to calculate your loan EMI amount. Not only can you feed in this
information after you have availed your loan but you can also feed in your
desired parameters to check if the resulting EMI amount is suitable to your
pocket.

The
latter option will help you in securing loan from the bank that is offering
rates and fees which result in the most affordable EMI.

**Using Microsoft Excel**

Microsoft
Excel tool can also be used to calculate the loan installment for your loan.
There are functions in Excel which help calculate different results. For EMI
calculation, the function used is PMT. This functions takes in three variables
for processing the EMI amount. These three variables are

Calculate your Loan EMI

Rate =
monthly rate of interest of loan

Number of
periods, nper = number of EMIs

Present
Value, pv = value of loan

Loan EMI
= PMT (rate, nper, pv)

The
function takes these three parameters and applies the PMT function to reach the
final value of the monthly loan installment that you need to pay.

**Using Mathematical Formula**

Wherever
you cannot access a computer or the internet for calculation of loan EMI, there
you can make use of the mathematical formula that helps you calculate the same.

This
formula can be applied to reach the loan installment amount that you need to
pay each month for repaying your loan.

Loan EMI
amount = [P x R x (1+R)^N]/[(1+R)^N-1]

Here, P
stands for Principal loan amount

R is the
rate of interest per month

And N is
the number of monthly installments

Calculating
your loan EMI even before you have applied for loan is a great step towards
planning your finances. It also helps customers to choose that particular bank
which offers the most suitable EMI amount to them. Also, calculation of

*beforehand helps customers to plan their monthly budget accordingly.*__loan EMI__
Despite
the various ways to calculate loan EMI which are listed above, the best way
which is least cumbersome is calculation of loan EMI via the online EMI
calculator tool. This online tool furnishes fast results without any hassle of
manual calculation.

## No comments:

## Post a Comment