Loans have become quite popular as a money tool. Lenders have seen vital growth in loans in the last few years. This is because a loan gives you a simple and rapid way to earn money during times of monetary crisis. Like any other money choice, a loan should only be accepted after checking each crucial aspect. This covers loan terms, rates, and other factors. A loan is a debt that impacts your lifestyle. As a result, before applying for a loan, you should gain clarity by using a Personal Loan calculator.
Personal loans are collateral-free. You must pay higher interest rates than those for secured loans. PL calculators are used to calculate the EMI on your loan.
What is a Personal Loan EMI Calculator?
A personal loan calculator assists you in calculating EMIs to repay your loan. All you need to do is enter the loan amount, tenure, and interest rate into the system, and it will calculate your EMI.
What Does EMI Stand For?
- EMI (Equated Monthly Installment) is the amount you pay every month to the lender to pay back the loan.
- The loan amount is the original amount plus interest that needs to be paid back.
- EMI is paid monthly. The total amount (loan plus interest) is divided by tenure.
- Initial interest is high. It reduces with each payment.
- The interest rate and tenure of EMIs are fixed.
- Note that EMI is the same, but the interest rate and principal can vary.
- A personal loan EMI calculator can be used to find your EMI.
How to Use an EMI Calculator?
A personal loan calculator is easy to use. It has easy-to-read charts and gives quick results. A PL calculator is used for home loans, car loans, personal loans, education loans, etc.
Given below is the data needed to find EMI using a personal loan calculator:
- The principal amount (in rupees)
- Term of the loan (in months or years)
- Interest rate (percentage)
- Unpaid EMIs or pre-paid EMIs (for car loans only)
You can adjust the values using a slider. For exact values, you can simply type them in the space given. The calculator will find the amount of your EMI when you enter the value. Let’s take an example:
- Principal amount: Rs. 5 lakhs from the bank
- Rate of interest: 10.5% annually
- Tenure: 5 years (60 months).
Then, the EMI = Rs. 5, 00,000 x 0.00875 * (1 + 0.00875)120 / ((1 + 0.00875)60 – 1)
= Rs. 10,869
This means that you need to pay Rs. 10,869 per month for 60 months to repay the entire loan amount.
The total amount payable will be Rs. 10,869 x 60, or Rs. 6,52,140, which includes Rs. 1,52,140 as interest toward the loan.
Documents Required for a Personal Loan
If you are self-employed:
- Copy of your PAN card
- Balance sheets
- Profit & loss account
- Partnership deed
- Other documents, etc.
If you are a salaried person:
- Copy of your PAN card
- Identity proof
- Bank statements from the past 3 to 6 months
- Residence proof
- Salary slips
- Guarantors with the same set of documents as the applicant
Features of a Personal Loan Calculator
Aids in choosing offers in terms of cost
A personal loan calculator helps you choose between various offers from lenders. Given how simple it is to use an EMI calculator, people can easily compare offers and review the repayment details. You can browse through various loan term options until you find one that fits your needs.
Simple to use
One of its main features is that it is simple to use and offers guidance at each step. With the help of the PL calculator, you can calculate EMIs easily. The lender may be considerate of the client’s comfort. In that case, lenders will make sure that the borrower knows how to use the PL calculator.
The quality of the results is one of the major perks of using the PL calculator. There is always the chance of getting the wrong data when using a manual system. You can avoid manually testing various rate pairings, desired loan rates, and loan tenures.
Another useful feature of using the PL Calculator is that it saves time by providing quick and precise answers. It is online, saving you the time and effort of going to the bank, standing in lines, and waiting for your loan EMI to be computed.
Removes The Demand For a Manual Sum
Getting the sum manually is time-consuming. You need to convert the data to fit the criteria of the formula in use. The EMI calculator is user-friendly and helps you avoid complex sums. To find the EMI amount, just input the desired loan balance, the loan rate, and the loan tenure. This saves you the time and effort of using the EMI formula manually.
Personal loans have become popular in recent years as these loans do not need collateral and may be used for several reasons. Despite having higher rates than other loans, such as a loan against property, many people choose personal loans since these do not require assets and function well in times of monetary need.
People prefer using a PL calculator to doing a manual sum.We know that no matter how helpful a loan is, it may cause your life to revolve around its repayment. As with any other money choice, it is advised that you take out a loan only after carefully considering issues such as loan amount, repayment ability, rates, loan term, and so on. A PL EMI system is the best way to assure accuracy and clarity when applying for a loan.
For more details on calculating EMIs using personal loan calculators, visit Piramal Finance. They have blogs similar to this one. You may also take a look at the products and services they offer.