Today, there may be numerous reasons that may prompt you to avail a loan for your financial needs whether it is to pay for hospital bills, buying a new home or vehicle, higher studies, business needs or even consolidating your debts. The convenience and easy application for loans make them a popular financial tool among people. You can “Apply For Loan“ despite of taking it as liability as there are flexible repayment options offered by the lenders these days.

In addition to that, getting a loan can help you to attain a strong credit report with a positive repayment history. Therefore, when you want to avail higher credit in future, such as business loan or home loan, lenders will review your application favorably because you would already have proved yourself as a low risk borrower. Now, we will take a look on some of the top reasons for which people avail a loan:

✓ To fulfill personal aspirations: Every single person has a set of aspirations that they want to achieve in their lifetime such as buying a fancy gadget, home renovation or buying a luxury car. A loan can help you to meet all these aspirational purchases because most of people still live on fixed monthly income.

One does not need to dig into his/her emergency funds to finance these expenses ensuring your loved ones are taken care if you are not there. A loan can help you to make these purchases easily and you can pay the lender in easy installments. You can also use EMI calculator to get an estimate of your installments and set budget accordingly.

✓ To consolidate the debts: In case, you have missed some of your previous loan EMIs or credit card bills then you have fallen into a debt trap. One can use a loan as financial route to consolidate such debts to tackle the situations and bring all your financial liabilities under single roof. Moreover, when you bring multiple repayments to a single monthly payout, it will help to boost your credit rating.

✓ To fulfill business needs: The major challenge in setting up or expanding a business is to find a funding for it. It is a fact that everyone is not blessed with significant savings so to overcome such scenario, opting a loan could be a best way to fulfill your business needs.

You just have to meet basic eligibility criteria proposed by the lender with a robust business plan. Once you fulfill the criteria, your loan will be disbursed into your bank account and you can utilize it to fund various business operations.

✓ To meet emergencies: However, you are prepared with some savings but future is unpredictable and you may face some circumstances where you are not in position to meet the financial expenses such as medical bills, emergency travel and car breakdown etc. therefore, you can “Apply For Loan Online“ to meet the entire expenses.

Hence if you need a quick flow of cash, a loan is undoubtedly the best way out. One can avail a loan after reviewing all the terms and conditions as well as the interest charges applicable on it to make the loan journey stress free.

In recent times, prices are hiking day by day and it’s impossible to make any big purchase without a loan. However, getting a loan these days has become much easier and turns out to be useful in the right circumstances. Before you approach any lending institution for loan, it’s advisable to know about the basics of borrowing so that you don’t regret your decision later. An EMI is a key factor of any loan, so we are going to tell you all about the EMI and its calculation. The term EMI means for equated monthly installment which is a fixed amount of money, you need to pay your lender as a repayment towards your loan until your loan is fully repaid.

An EMI is nothing but a loan feature that allows you to borrow money for emergency use while letting you to repay it in installments over an extended period of time. It is paid to the lender on a fixed date every month by setting up auto debit system or via cheque through your bank. There are two main components of EMI, the principal amount and the interest component on it. In initial years of loan after you “Apply For Loan“ huge portion of monthly installment consists of interest but as the loan matures, the outstanding loan quantum reduces gradually and the interest part becomes lower than the principal amount. The EMI amount also gets changed in the following cases:

Prepayment of Loan: If someone prepays the loan money during the tenure of loan, EMI will change accordingly. The prepayment cuts down on principal amount, therefore interest will be charged on new principal amount now. You can also ask the lender to change the tenure instead of EMI which leads you to repay the loan money quickly.

Progressive EMIs: Some of the lending institutions also offer the option of repaying the quantum through progressive EMIs. In this case, you initially pay a limited amount for specific time and after completion of this period, you start paying larger installments. It is generally preferred by the individuals who just started their career and cannot afford large EMIs initially but hope to pay it as they grow in their work place.

There is a particular mathematical formula to calculate an EMI which is given below:
P x r x (1+r) ^n/ ((1+r) ^n-1), where P stand for principal amount, r stands for rate of interest and n stands for duration of loan in terms of month. Nowadays, banks and non- banking financial institutions are offering use of free online calculators on their official websites when you “Apply For Loan Online“. These calculators can help you to know how much installment you need to pay each month so that you can plan your budget accordingly. It should be a prior thing in your checklist while securing a loan to calculate EMI beforehand to stay out of debt forever. Hence, you know all about EMI now, go ahead and choose the loan that suits your needs.