Loan borrowers needed to stall the banks or stay on hold with the banks’ employees just to know how much is the Equated Monthly Installment (EMI) they are required to pay or what will be the value of their investment after a few years. This required the bank’s assistance since it required complicated Excel sheet calculations to be carried out with complicated mathematical formulae in place. Now this has been done away with the introduction of online financial calculators who just ask you the basic information and give you detailed results as required in a matter of just a few seconds.
Where can you find them?
A few banks and mutual fund companies have websites that provide such calculators which can be used for loans and returns, respectively. Other alternatives can also include financial planning websites and even loan portals that provide similar or enhanced facilities. The only thing that you need to be careful about here is that you need to choose sites that are quite popular. Also you can compare the results between popular sites and check as to how far the results are accurate.
Things to calculate:
Your EMI:
Calculating your current or prospective EMI is quite simple. All you need to do is enter the amount of the loan you wish to borrow, its tenor and the rate of interest that it is being charged with. The EMI for the above mentioned details will appear on your screen. If you feel that the threat of rise in the interest rate is possible in future or if you might require a loan of a higher value, key in the data and see the EMI requirement after these changes are made.
Eligibility:
Logging onto loan calculators by banks or financial institutions give you the opportunity to find out whether or not you are eligible for applying for a particular loan. All you are required to do is to fill in details relating to your occupation, your income level, type of employment etc and after entering the values you will get to know whether or not you can borrow a loan.
Switching your lender:
If you are a borrower of a home loan and are planning to switch from your current lender to another you may want to know whether such a move is profitable for you or not, you need to enter the details of your existing loan, prepayment penalty, processing fee, details of the new lender as specified by the site. Just by clicking on the enter button, you will get to know whether you can expect positive or negative returns from such a decision.
Benefits of prepayment:
If you want to know whether or not prepaying a loan can be beneficial for you or not, the same can be answered by your financial calculator.
Rate of returns:
Suppose you want to accumulate funds for the purpose of financing your child’s education some 10 years down the lane and want to know as to how much and for how long you need to save and what are the returns that will benefit the investment, you need to enter the particulars in the calculator such as the principle amount and tenor of the investment. If you are not satisfied with the results that has been published since the rate of interest is not upto your expectation, try increasing your savings and then see if that could make any difference. Else calculate the rate of interest by which you can choose to reach your target with the given investment and the tenor.
Apart from all these useful calculations, one can take advantage of other calculations that have been prevalent in the market for quite some time like the rupee conversion, income tax calculators etc.