Hence, in this blog, we’ll guide you to discover how Khiwasara can help you calculate your EMIs, specifically EMIs on vehicle loans, to simplify your financial journey.
Let’s understand what EMI is:
EMI stands for Equated Monthly Installment. It is the already-determined fixed payment that borrowers have to make to lenders on a specific date every month. This payment includes the principal and the interest amount.
How does an EMI work?
In the starting EMI payments, a larger portion of the amount goes towards paying the interest, while a smaller portion reduces the principal. As the EMI continues, you pay less interest as the principal amount to be repaid increases, so that your loan is paid eventually.
How is EMI calculated?
EMI is popularly calculated by using the following two methods:
The Flat-rate method
In this method, each interest charged is computed using the original principal amount. Here, interest is charged on the entire principal amount throughout the loan tenure. The principal amount does not decrease over time in this calculation.
The reducing balance method
This method is also called the diminishing balance method. EMI under this method is calculated on the outstanding principal amount each month, which decreases as you repay your loan. It’s considered fairer than the flat-rate method because it reduces the principal amount with each payment.
EMI on VEHICLE Loans:
What are vehicle loans?
Loans that are given for the sole purpose of purchasing vehicles, like cars and bikes, The EMI calculation depends on factors like the vehicle’s cost and the loan tenure.
If you want to purchase a new vehicle and need loan options that provide you with favorable EMIs, you can use an online EMI calculator to find a suitable loan.
Here is a trusted and reliable calculator which provides you with accurate results: calculate now.
The following factors are required to calculate EMI on an online EMI calculator:
- The principal amount
- The rate of interest
- The loan duration
By knowing the above 3 factors, you can calculate your EMI before purchasing your dream vehicle. Remember to repay your loans on time to maintain a good credit score, as it will help you avail loans on favorable terms.
Calculate Your EMI for Vehicle Loans with Khiwasara: Simplify Your Financial Planning.