Essentially, a financial planning tool a financial calculator is designed to help users create a budget, plan investments, and approach retirement in a prepared manner. Such a tool is readily available online and can be accessed free of cost to navigate through one’s finances.
Today there are multiple financial calculators available in the market that are designed to ascertain the variables of different investments or savings options. Based on one’s requirements, individuals can access a financial calculator and align their debt, investments, and savings accordingly.
That said let us take a quick look at the common financial calculators and how handy they are for users.
Types of Popular Financial Calculators
Here’s a list of commonly used financial calculators that make financial planning and management easier.
Loan EMI Calculators
These popular financial calculators are used widely by intending and existing borrowers to eliminate the tedious task of computing monthly installments that are payable towards servicing their loans.
- Personal Loans EMI Calculator
This tool helps determine how much money you owe towards your personal loan. Computing personal loan EMI in advance helps compare different loan options and their affordability better.
- Home Loans EMI Calculator
Buying a house is a big commitment, especially if you are taking out a home loan to finance it. This is why it is crucial to plan the investment carefully with the help of a home loan calculator to understand the monthly liability along with the down payment that you need to make towards the credit.
- Loan Against Property EMI Calculator
A loan against property is a secured loan where your house or office is kept as collateral security. This tool helps to understand if taking out a loan against property is worth the risk by helping you understand your monthly liability and helping to compare the same with your repayment capacity.
- Education Loans EMI Calculator
Education loans have emerged as crucial financial aid to parents who are planning to invest in their child’s higher education. However, this also entails picking a plan with an extensive loan amount at a competitive rate of interest. Using an education loan EMI calculator can help find the same by allowing users to compare the merits of different plans.
- Car Loan EMI Calculator
Such a financial planning tool proves useful in understanding what will be the monthly liability towards a car loan. Subsequently, users can add it to their estimated monthly gas and car maintenance charges to understand if they are financially ready for such a responsibility.
- Gold Loan EMI Calculator
Gold is a precious metal that has high market liquidity. This makes it an ideal collateral security to avail funds. Using a gold loan EMI calculator can offer users an idea about how much money they can access against their precious metals and plan their loan accordingly.
- Home Loan Balance Transfer Calculator
The Home Loan Balance Transfer helps compute how much money you may save by transferring your current home loan to another financial institution. However, make sure to account for additional transfer charges to gain a better picture.
- Deposit Calculator
This tool helps understand how much interest one can earn on their deposits based on the type of deposit scheme. Typically, there are two types of deposit calculators – recurring and fixed deposit calculator.
- Retirement Calculator
This tool is designed to help individuals plan their retirement. It offers an insight into how much money they would need to invest now to build a corpus that is enough to lead a comfortable lifestyle after retirement.
- Loan Eligibility Calculator
Such a tool is designed to help individuals ascertain their eligibility to access funds from a lender. Lower eligibility gets one’s loan application rejected which is detrimental to one’s credit record. This lowers the risk of getting one’s application rejected and protects their credit score and CIBIL report from being harmed.
Perks of a Financial Calculator
These are some of the top benefits of a financial calculator that aids individuals with their financial management:
They help determine income or debt obligations
The key purpose of a financial calculator is to assist users in determining the returns on investment or debt obligations of a loan. In case of loans, a financial calculator is likely to help you ascertain the amount of interest liability you would have to pay and the EMI you need to clear to service the debt. On the other hand, for investments, these calculators will help you compute the estimated interest you could accrue and the maturity amount.
They help plan investments and loan repayments
You can effectively plan your investments or borrowing with the help of financial calculators. For instance, Suppose Sweta wants to build a corpus of Rs. 10 lakhs in 10 years. She can use an investment calculator like a SIP calculator or a recurring deposit calculator to determine how much money she would have to park into the desired scheme each month. Similarly, if Rajat wants to take a personal loan of Rs. 20 lakhs and repay the same in 10 years, he can use a personal loan calculator to determine how much money he will have to set aside from his monthly income to repay the debt.
They offer accurate results and help save time
It is possible to manually calculate the returns on an investment option or the debt burden accompanying a loan using the right formula. However, the manual process is time-consuming and may result in inaccuracies or mistakes in computation. On the other hand, a financial calculator can help save time and effort by extending accurate results within seconds.
- They are easy to use and cost nothing
One of the most important advantages of a financial calculator is that they are user-friendly and easy to access. Furthermore, such calculators are quite simple as users just need to enter the correct variables to obtain results.
Based on one’s investment or debt option, individuals can pick a financial calculator and plan their finances with greater ease. Financial calculators are also a great tool for budgeting and can help one become more disciplined in their approach.