Loan Comparison With Comparisontable & ComparisonChart
Loan #1
What is Comparison?
*EMI comparison is the process of evaluating different loan offers from various lenders by calculating and contrasting their Equated Monthly Installments (EMIs). The primary goal is to determine the most affordable and suitable repayment plan based on one budget and financial goals.
*The key factors involved in EMI comparison are the principal loan amount (P), the interest rate (R), and the loan tenure (N). Lenders offer different rates and terms, so comparing the resulting EMIs helps a borrower save money on interest and manage their monthly cash flow effectively.
Example of EMI Comparison
*Suppose a person, Ravi, wants to borrow ₹7,00,000 for a car loan with a repayment period of 5 years (60 months). He checks offers from two different banks:
*Lender=Bank A, Principal(P)=₹7,00,000, Annual Interest Rate=9%, Tenure(N)=5 years, MonthlyEMI(approx.)=₹14,516, TotalInterestPaid=₹1,70,960, Total Repayment=₹8,70,960.
*Lender=Bank B, Principal(P)=₹7,00,000, Annual Interest Rate=11%, Tenure(N)=5 years, MonthlyEMI(approx.)=₹15,227, TotalInterestPaid=₹2,13,620, Total Repayment=₹9,13,620.
Comparison Analysis:
*Monthly Outflow: Bank A has a lower monthly EMI of ₹14,516, which is ₹711 less than Bank B EMI of ₹15,227.*Total Cost: Over the entire 5-year tenure, Ravi would pay a total of ₹42,660 more in interest with Bank B than with Bank A (₹2,13,620 - ₹1,70,960).
* Decision: By comparing the EMIs, Ravi can see that Bank A offers a better deal, resulting in significant savings on the overall interest cost.
How to Perform an EMI Comparison
Online EMI calculators are the most common and error-free tools for this purpose.
*Gather Information: Collect the principal amount, interest rate, and loan tenure for each offer you want to compare.
*Use an Online Calculator: Input the details for each loan option into an EMI calculator.
*Analyze Results: Compare the resulting monthly EMI amounts, the total interest payable, and the total repayment amount to make an informed financial decision.
*Comparing EMIs ensures you choose a loan that is not only manageable within your monthly budget but also cost-effective in the long run.