Like EMI Calculation, the amortization calculation show the entire life cycle of the repayment of the loan amount by the customer to the bank / financial institutes which are paid by an Equal Monthly Installments generally called EMI. In Amortization calculator, the entire life cycle details of the loan repayment is described in detail which includes the repayment of the entire loan EMI wise which includes the Principal Amount, Interest Amount from 1st EMI to last EMI.

img How to calculate the amortized assets?

  • Get the detail to calculate the loan: First of all, to start with the calculation, you will have to pick all the possible information that will give the details of the principal amount and interest rate. In addition, the loan term is also very significant.

  • Now prepare an excel: Now you have to segregate each column and put a heading as principal, payment of interest, payment of principal, and ending principal. Definitely, the excel will allow you to enter the numerical quite smartly. On the top of that, you are likely to get the faster result as well. If you want a better result, then please do use the online loan amortization calculator.

  • Check the first monthly interest term: To calculate the monthly payment term, you will have to convert the interest rate into monthly sum. As you calculate the value of amortized properties like the loan for a car or mortgage for the home, therefore you will have to include the principal and the interest to calculate the amount of every payment.

  • Calculate the principal for the initial month: In order to get the principal amount of the payment, you will have to deduct the rate of interest for that month from the payment.

img Benefits of the amortization

  • Accurate result: The loan amortization calculator assures business owners to get accurate results which in turn make their payment easier. On top of that, they also get a chance to have an intimate view of the earnings, profits, and sales.

  • Tax subtraction: Indeed, this is one of the most talked about the benefit of the amortization. Here you will see that no matter whether you pay for the asset or not, the tax will get subtracted from the present tax. But one thing you have to make sure that you are utilizing the asset to the fullest. Certainly, it relaxes you from tax incumbent. Therefore, whenever you review the balance sheet it will show extra income and also hint you that additional assets are added to the list.

Thus to conclude you would see that compared to bullet loan the amortized loan is quite convenient. As the loan repayment options in amortized are quite flexible as you can pay for the loan term. But the problem with bullet loan is that you have to pay that eventually on the date of maturity. Hope you are impressed with the idea!

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