Using an EMI calculator online is a smart practice to plan your EMIs better! Source: Image from

Buying your own house or a car is a personal milestone in your life, most of us dream about it. Having a lucrative income and loaning out the funds to get your dreams to come true can be a tricky situation if you don’t plan the EMIs well, the dream could soon turn into a nightmare if things go south.

To make up for the heavy down payment you’ll still need to find enough money, not to mention the EMI that takes large chunks out of your salary each month. The EMI amount fundamentally depends on the amount you have borrowed.

In order to plan effectively, you must first calculate monthly EMI online and assess how much your salary will go to EMI and how financially comfortable you will be when you pay EMIs on time. There are a plethora of EMI calculators online available to calculate EMIs. An EMI calculator online helps you to plan your EMIs by displaying almost accurate estimates and help you maximize your savings effortlessly.

You require a solid planning and execution process to pay off your loan, attain your financial freedom, and live your dreams stress-free!

Here are some points you need to consider to plan you EMIs better to maximize your savings:

  • Figure out your expenses: This is the fundamental and the most important pointer to keep in mind; to track where your money is going and where it will go during your EMIs. During the tenure of your EMIs, you need to chalk down the expenses as to where you need to spend the money and where you can avoid spending. You need to cut down on the unnecessary spending for a while till your EMIs get paid off, segregation of your needs and wants can make a huge difference in figuring out your expenses which will cause less strain over the course of the EMIs.
  • Smart Investments: Another clever move you can take is to invest any excess money you’ve saved in a particular month, in a good mix of mutual funds. This can take off your burden to a larger extent. There may be times when you get an unforeseen lump sum amount or a bonus, you need to astute and use this amount wisely. Investing such amount or prepaying the loan amount to cut on your EMIs tenure or reducing the interest rate. You need to be comfortable with the monthly cash flow after you cut the EMI. In such a situation, what is even more useful is to reduce the overall tenure of the loan, so that the total interest outflow is reduced.

Maximize your savings with an EMI calculator online. Source: Image from

  • Budgeting: Spending less is saving more! Have a well-planned budget for situations of emergency, as it is always important to save yourself for a rainy day. You need to have at least an emergency fund of 3 to 6 months for your basic expenditure excluding your loan. If you don’t pay your EMIs on time, you will be on the defaulters’ list, which will eventually affect your credit score. Abide yourself to the tight budget, after all, your aim is to dispose of the loans.
  • Separate Accounts: Having separate accounts is one of the smartest ways of servicing your loan EMIs, other than having your saving accounts. Having multiple debits from a single account can be tedious and time-consuming which may lead to difficulty in tracking. So it is advisable to have different accounts, one for the loan EMIs and others for your personal usage, this will help you to control your overall expenditures and discipline yourself.
  • Debt payment prioritization: If you have multiple debts to be repaid, it is essential that you prioritize and sort them according to their interest rate. The target should be to repay the amount with the highest interest rate so that you can save on the interest, this will help you save a huge amount in near future, which can be later used to repay the other loan amounts.

Along with these points you need to keep the golden rule in mind that your home loan EMIs should not be more than 40% of your income and in case of personal loans, the repayment amount should not be more than 10% of your salary.

Sometimes the banks do offer discounts and different schemes on the loan to their loyal customers who have had a commendable credit history. Exploring this option can give you a huge boost and lower your financial burden, furthermore, helping you to save on a considerable amount for your future. Hence you should always keep in mind that there should be a timely repayment done of the loan EMIs to have a good credit score, which will ensure access to credit from various financial institutes and banks. Lastly, there is always an option to have the loan from the bank which you already have an account with or have a creditable relationship any other way. Use an EMI calculator online to plan your monthly EMIs, monthly interests well in advance, and start your financial planning already, to maximize your savings!