How BankBazaar Personal/Home/Car Loan EMI Calculator Works?
The BankBazaar Equated Monthly Instalment Calculator is very easy to use. It uses some basic details of the loan that you are willing to avail. In the calculator, you will be required to provide the following details:
- Adjust the slider on the top or type the loan amount.
- Under the ‘Loan Amount’ slider, adjust the ‘Tenure’ slider or type in the loan repayment tenure that you are willing to avail.
- Fill in the field provided for the rate of interest.
- Fill in the field provided for the processing fee.
- Check the box under these field, if you want to make pre-payments.
- Hit the ‘Calculate’ button after entering all details.
After this, the BankBazaar EMI Calculator will process the details and show you ‘Your Monthly Loan EMI’ amount. In addition to this, the calculator will also display a detailed amortisation table for the loan. The actual loan amount, total due interest, and the processing fee are also calculated and displayed at the same time.
Effect of loan prepayment on your Instalment payments
Should you find yourself flush with cash, you may decide to prepay your loan (i.e. pay an extra amount towards principal). If so, you can calculate your new EMIs by adjusting for the amount you wish to prepay. This will let you know how much interest you save by reducing the principal outstanding. (interest is calculated on the principal outstanding).
On the basis of the prepayment that you make and the terms and conditions of the loan-provider, you might be required to pay an extra amount in the form of prepayment charge or fee.
Factors that can impact your due amount
When you are planning to take a loan for your financial needs, you need to calculate the amount that you will have to pay through equated monthly installments in order to match with your repayment capability. For this, you will need to take a few factors under consideration which can be altered to meet your loan requirement and repayment capability:
- Rate of Interest (ROI): The rate of interest of the loan that you are availing will contribute in determining the due instalment amount. The best way forward would be to compare different loan products and then choosing the one that serves you best. A lower rate of interest will mean that the overall amount that you pay towards interest will also be low.
- Loan amount: The loan amount will also help in determining the overall EMI amount that you would have to pay. Thus, choosing the loan amount wisely is an important step.
- When the term of the loan changes If a person manages to get his or her loan tenure extended or reduced, the Equated Monthly Instalment payable towards the loan will also increase or decrease accordingly in order to adjust to the new loan tenure. If you opt for a long tenure, you will have to pay more money towards interest in the long run. However, a shorter term of the loan will translate to less amount to be paid as interest but higher EMIs.
FAQs on EMI Calculator
- Are the calculators for home, car and personal loans the same?
In most cases they can be the same since all three loans work off the same basic set of information like amount borrowed, prepayments, tenure, interest rates and processing fee however with some calculators there could be a restriction placed on the amount to borrow based on the type of loan.
- Is the Equated Monthly Instalment amount shown by the calculator the same as that which the bank will ask me to pay?
When it comes to the EMI, assuming that the bank will approve the amount and tenure, the exact instalment that you will have to pay may differ slightly since there is a chance that things like the interest rates and the processing fee may be a bit different from what you used while calculating the due amount.
- What happens if I fail to make an Equated Monthly Instalment payment?
The bank will charge a penalty fee if a borrower misses an EMI payment. A missed or delayed instalment payment will reflect on your credit report. Not making loan due amount payments on time can have a negative effect on your credit score.
- Is my loan EMI fixed or can it change over the loan tenure?
In the case of a business loan and home loan, banks offer floating rate of interest. Therefore, your loan instalment may change with the change in interest rate. Some banks allow you keep the Equated Monthly Instalment constant while increasing the loan tenure. Loan prepayment can also change your due amount. Banks will give you the option to either keep the EMI constant and decrease the loan tenure or reduce the Equated Monthly Instalment and keep the loan tenure the same.
- Is it good to pre-close a loan before the end of its tenure?
Pre-closing your loan before the end of its tenure can have a negative effect on your credit score. Making timely due payments can help you improve your credit score. Therefore, opt to prepay a part of your loan (not the whole loan) and reduce the loan tenure to save up on interest payments. Banks charge a penalty fee for prepayment.