How to be a smart borrower: Uses of an EMI calculator

Even though an individual would save up sufficient funds, there will be a time in life where finances will be strained. In such a case, opting for alternate funds is an ideal way to relive this financial stress. But before an individual can approach a financial institute for a loan, there are certain factors one must be aware off.

As these factors can further influence one’s financial decision, careful consideration must be taken before the applicant process commences. In order to be a smart borrower one must need to consider the following factors:

Principle amount

Although the financial loan is available, one must not blindly approach the application process before knowing what one’s requirements are. The principle amount incorporates the value an individual would want to borrow. While it might be tempting to borrow a large amount to conveniently satisfy the financial needs, the resulting repayment process will be tedious. Using tools like the EMI calculator will help in selecting the right principle amount. These tools won’t only satisfy the financial requirement but also provide a convenient repayment process. Thus, one can easily create a financial plan that will leave you with sufficient funds, yet provide you with a financial relief.

Interest rate

Interest rates differ from different types of loans. As compared to the secured loan, unsecured loans come with a high interest rates. Therefore, when applying for a particular loan, one must be aware of how much one is applying for and how much one would be required to repay back. This will help the applicant plan his income and additional financial requirements. For example, consider a home loan. One can easily use the home loan EMI calculator, to calculate the ideal home loan interest rate and yet leave him with sufficient funds for other additional requirements.

Repayment tenure

Similar to the interest rates of the loan, the repayment tenure of the loans also differ from type of loans. A loan repayment tenure can last anywhere between a few months to 30 years, depending on the type of loan one applies for. However, determining the ideal repayment tenure depends on one’s income and the financial habits. If the applicant is aware of these factors and how they would fare in the future, one can choose a repayment tenure that is ideally suited for them. EMI calculators like the personal loan, car loan or even the home loan EMI calculator go a long way to ensure that one will be able to repay the loan with ease and convenience, yet leave them with sufficient funds for additional loan repayments.

Any individual can borrow funds from a financial institute. However, when borrowing such funds, one must always take smart steps to ensure that one can repay the borrowed funds with ease.