EMI stands for Equated Monthly Installment. It includes repayment of the principal amount and payment of the interest on the outstanding amount of your home loan. A longer loan tenure (for a maximum period of 30 years) helps in reducing the EMI but at the same time increases your interest cost. Remember, interest payments hamper any of your efforts to build wealth. So only go for a loan if it is absolutely necessary.

Borrowing money means that you are committing to pay the money back within a certain time frame and at a certain interest rate. When you take a loan, not only does the cost of your purchase increases with interest cost and fees, it also puts a financial burden on you that can cause stress. If you can delay the purchase, and invest that money instead, you may be able to generate enough cash to buy it on your own.

An EMI Calculator assists in calculation of the loan installment i.e., EMI towards your loan. It an easy-to-use calculator and acts as a financial planning tool for you when you decide to borrow money for buying home, car, etc. As a borrower you should consider the EMI amount,before you take on any loan, to accurately plan your current and future finances.

The Arihant online calculator is easy to use and takes just a few seconds of your time. Here’s how.

Insert the variable vis-à-vis principal, tenure, rate of interest and processing fee.

The calculated EMI value will be displayed immediately along with the total cost of your purchase including total interest and processing fee.

Arihant’s EMI calculator can be used for all types of loans including home loan, personal loans, car loans and business loans. All you need to know is the interest rate payable on the principal amount and the tenure.

Failure to honor your EMI commitments could result in serious financial issues. That's why, before signing on the dotted line, you should consider how borrowing money could affect your future finances.

Any late or skipped payments will affect your credit score and worsen your debt. Additionally, your loan provider, like banks and NBFCs, levy heavy penalties on unpaid EMIs. If you miss an EMI, you may have to not just pay extra amount in the future, but the collection agents can really be a nuisance.

So, before taking out a loan, you need to also consider how you will pay this loan off if you were to lose your job or your business is not generating enough cash. Your emergency fund, a spouse's income or another supportive family member may be able to help. If you are single or live in a one-income household, you need to be extra careful about any debt that you take on.

Borrowing money is a big financial step, and it can help you or hurt you—depending on how you manage it. Many a times, the purchases that seem necessary aren't really necessary upon further consideration. You can postpone most purchases until you have saved up the money to buy them in cash, rather than going into debt to make the purchase now.

The most substantial loan you’ll ever take is for buying a home. If you can afford a sizable down payment and it’s a home that is within (or below) your means, it might mean taking out a loan is worth it. Education loan is another good debt that can help you create a better financial future.

When you are taking a loan for buying a car, it's tempting to go all out - opting for the high-end model with all the extra features. However, when you're going into debt for a purchase, it's smarter to scale back and buy a used version, an older model, or otherwise seek out cheaper options. Whatever money you save, you can invest those funds for your next big purchase.

However, any other kind of loan should be taken only upon careful consideration. Borrowing money to pay for things like medical bills, refurbishing your house or buying a new phone is never ideal. We recommend building up emergency savings first and ensuring you a health insurance plan before you start spending on discretionary things. Also, use your savings and investments for such type of expenses rather than borrowing.

Let us help you with your debt planning. Reach out to us on contactus@arihantcapital.com