The advent of modern online mathematics tools like converter and interest rate calculator have really made the complicated tasks related to the calculation, extremely easier. These modern online devices are basically meant for offering simplified solutions related to the conversion and calculation of complicated arithmetic and logical problems. Especially, when it comes to the calculation related to interest rate of a loan, interest rate calculator proves to be of great help. While selecting it, make sure that it is user-friendly and is capable of performing the calculation quickly. Generally, there lies a big misconception that this advanced tool only offers assistance in revealing about the EMI.
The benefit offered by it goes beyond knowing EMI’s. Using this tool is extremely easy. A user simply has to enter the loan amount in the EMI calculator that he desires to opt for. After that, he needs to enter the loan tenure and the rate of interest. Thereby, he simply requires pressing on ‘calculate’. Apart from revealing about the EMI, this dynamic tool also reveals other important information including total amount with interest, total interest amount, yearly interest amount and flat interest rate/annum/month. Thus, it helps its user to analyze about the loan options by taking into consideration a big picture.
If a user finds that EMI is beyond the limits of his affordability, he can recalculate by curtailing the amount of loan, by trimming the loan amount or extending the tenure of the loan, in a calculator. A borrower shouldn’t forget to compare quotations from different banks. Thus, by doing so, it becomes possible for him to know that which loan will fit the bill. The EMI basically depends on the loan amount, the interest rate, loan tenure. It is a combination of interest amount and principle amount to be repaid, in an unequal basis. According to an ideal principle, EMI should not exceed beyond 40% of the monthly income. Nevertheless, an interest rate calculator is merely a tool to provide you clarity regarding best deal, but that doesn’t mean that a person should not do some homework before taking personal loan.
Interest rate calculator – What to look for?
A comparative study: One should always compare the rate of interest by checking with at least few banks. This leads to a better analysis that which bank has utmost transparent policies regarding loans.
- Tenure: It indicates towards the number of years for which the loan is being taken. It is apparent that longer the time duration, higher will be the amount of interest.
- Loan disbursal time: It refers to that period wherein loan is processed and customer receives the DD (Demand Draft) from a bank. It differs from bank to bank. Thus, one should not ignore this aspect and should get proper inkling regarding the Turnaround time, from the bank.
- Miscellaneous charges: Besides interest, a borrower requires bearing other charges as well, that includes processing fees, pre-payment charges, administrative charges. Thus, a borrower should do the comparative study regarding this as well.
After a thorough analysis regarding all these points, using an interest rate calculator makes more sense because its functionality is enhanced as it is able to serve better.