Online financial calculators are essentially tools that help users navigate their finances better and manage the same with more confidence. Well-rounded financial calculators help users in more than one way and aid in budgeting and more.
However, there is more than one financial calculator available in the market today and they all help ascertain the value and returns of different financial instruments.
This makes it vital for an individual to know about the basics of financial tools such as their types, uses, and steps to access. Once an individual gains an understanding of the same they will be better equipped to find out which specific financial tool is most suited to them and how they function.
On that note let us delve into more details about financial calculators.
Why is Financial Calculator Important?
Since financial calculators are designed to help plan finances and investments to make payments more precise. The tool helps to achieve this by computing
- The amount you should invest to achieve your goals
- The amount you need to save
- The amount you need to pay
Types of Financial Calculators
They are different types of financial calculators available today that use different sets of variables to offer desired results.
Some of the most commonly used calculators are listed below:
- EMI Calculator
This financial tool is designed to help you compute your monthly obligations toward an active loan. Such a tool helps estimate monthly installments toward a loan that you intend to take. This helps understand whether the same is affordable for you and matches your repayment capacity or not.
With the help of an EMI calculator, users can also determine the ideal loan tenure.
Additionally, EMI calculators help compare different loan options extended by financial institutions to make an informed choice.
Collectively, this helps to understand how a certain tenure and prevailing loan interest rate impact the monthly liability.
That said, let us check out the most popular EMI calculators available today:
- Personal Loan Calculator: This financial planning tool helps users plan their personal loan repayment even before taking out credit. Users can easily find out the monthly liability and compare popular personal loan options by using it to pick the most suited one.
- Home Loan EMI Calculator: Purchasing a house is a big investment and therefore calls for thorough planning. This becomes more crucial if one intends to take out a home loan. Intending borrowers can use a home loan calculator to ascertain the potential debt burden and decide whether they are ready for such a big move or not.
- Loan Against Property EMI Calculator: Pledging a property as an asset is a tough call and risky if you don’t manage your debt properly. The determine whether you can juggle your monthly expenses with a loan availed against your home, office, or factory, you can utilize a LAP calculator.
- Education Loan EMI Calculator: An education Loan helps individuals to cater to their child’s future by funding their higher studies. Individuals can use an education loan EMI calculator to determine the ideal loan EMI and tenure combination and plan their investments toward their child’s future.
Besides these, car loan EMI calculators and Gold loan EMI calculators are also commonly used to plan their repayment.
B. Home Loan Balance Transfer Calculator
The Home Loan Balance Transfer (HLBT) Calculator helps users calculate how much they can save by moving their current home loan to another lender. Using a home loan balance transfer calculator will help ascertain the savings, allowing borrowers to decide whether they should stick with their current lender or move to another.
C. Loan Eligibility Calculator
A loan eligibility calculator reveals the amount of loan you are eligible for and also helps determine the monthly installments. This proves useful to understand whether applying for a loan will help meet their needs and if they run the risk of loan rejection. Typically, rejection of a loan application harms the applicant’s credit score and credit report.
D. Deposit Calculator
The calculator helps to find out how much interest you may receive on your fixed and recurring deposits and compare the same. It also discloses the estimated value you are likely to receive from your investment at maturity. Thus, giving an idea of whether your deposits will generate inflation-adjusted returns or not.
Typically, there are two types of deposit calculators:
II. Recurring deposit calculator
E. Retirement Planning Calculator
Have you ever considered how much money you would require to maintain your current lifestyle standard after retirement? A retirement calculator is designed to help you ascertain the same. It is a reliable tool when it comes to determining if you can meet your long-term retirement goals with your existing savings and investing strategy.
Key Benefits of Using a Financial Calculator
Reliable financial calculators prove beneficial in these ways:
1. They will help compute your returns or potential debt obligations
The primary function of a financial calculator is to assist you with estimating the returns on investment or debt obligations of a loan. An EMI calculator will tell you how much money you will pay in a month to service the loan, whereas, an investment calculator will help estimate the interest you may earn on your investments.
2. They will help plan your long-term or short-term investments and loan repayments
One can efficiently plan investments or existing loans by utilizing financial calculators to determine their returns or debt commitments. For instance, suppose Maria wants to build a corpus of Rs. 10 lakhs over a period of 10 years. She can easily find the amount she needs to invest monthly to achieve her goal by using a financial calculator. Similarly, she can also a calculator to plan the repayment of her current and potential borrowings.
3. They are user-friendly and allow multiple adjustments for free
One of the most significant benefits of financial calculators is that they are relatively simple. One can easily use them in a few steps by simply entering the required data in the appropriate fields. Above all, individuals can easily find a variety of fixed deposit calculators, EMi loan calculator, etc., online that are free to use.
4. They come with a pre-loaded formula
This eliminates the need to do manual calculations and helps avail accurate results within seconds. In turn, this makes the process of computing loan burden or investment returns quick, hassle-free, and accurate.
All these features and associated benefits make a financial calculator so crucial for financial planning. Use a financial calculator to develop a solid repayment or investment approach and make the most of your finances to ace your goals.