The Indian debt market says that personal loans are the most popular. This is more than 78% of all the credit that is taken out in India. They are very appealing to people who want to borrow money as the lender takes no risk. If you want to apply for one of these credits, you should learn about them first. The first and most vital decision a borrower must make when getting a loan is how much the monthly payment, or EMI, will be. EMI calculators for personal loans are the best way to figure out and calculate EMIs.
What is the personal loan EMI calculator?
Borrowers of personal loans who wish to check how much principal and interest they will be paying back monthly must use an EMI calculator for this purpose.
To know the monthly payments (EMIs) for a personal loan, a formula is used in which the loan amount, the length of the loan, and the interest rate are entered. Make use of this calculator to check your personal loan’s EMI, depending on the loan amount, interest rate, and period that you enter into the respective fields.
How does using an EMI calculator for a personal loan help someone?
Because of the wide variety of factors that can affect the monthly payment of a personal loan, calculating EMI can be a tough task. The statistics can be a big problem for those people who do not have a strong understanding of how to calculate EMI. When faced with challenges of this nature, having access to an EMI calculator for a personal loan might prove to be of great assistance.
- It reduces to seconds what would have previously taken hours to complete these intricate computations.
- It is no longer possible for the calculations to be incorrect in any way.
- Because it provides you with all of the necessary information, you will be able to make forward-thinking plans for how you will pay it back.
How to use it
Entering a few details about the loan, including the following, allows you to use the personal loan EMI calculator:
- Amount of the loan: How much cash you would like to have borrowed.
- Term of the loan: How much time you’ll have to make payments on the loan before it’s due? The duration of the position must be between 1 and 5 years.
- Interest rate: The amount of money, stated as a percentage of the total loan, that the lender will charge you for you to borrow the money. Enter the range of your credit score to get a rough idea of the interest rate. This is helpful if you are not well aware of the interest rate. It must be between 1% and 50% at the very least.
After you have input all of the relevant information regarding your personal loan, the personal loan calculator will offer you three figures. The following explains what each number indicates:
Your lender may impose personal loan costs in addition to the interest on the loan. These fees may include the following but are not limited to:
- A lender may impose an origination fee to recoup loan-starting costs. Origination fees can range from 1% to 8% of the loan amount, depending on your credit history and lender. Fees can be paid beforehand or applied to the principal. This could reduce cash flow more than expected.
- Late fees may apply if you don’t pay your payments on time (your loan agreement will outline the details). Late payments cost money and might harm your credit. Setting a schedule helps ensure on-time monthly payments.
- A lender charges a prepayment penalty instead of the interest that would have been received on the loan. Before extending credit, lenders must disclose prepayment fees. When paying off a debt early, read the fine print.
Calculate personal loan EMI
Personal loan EMIs are calculated using a universal formula used by all available online calculators. The EMI calculator for personal loans offered by Piramal Finance follows the standard formula to check the precise monthly payment that will be required to service your loan. Calculating the EMI requires the following formula:
EMI = [P x R x (1+R) n] / [(1+R) n-1]
In this case, P represents the principal loan amount, R is the interest rate and n is the number of monthly payments.
Benefits of using a personal loan EMI calculator
Here are a few perks of using an EMI calculator for a personal loan.
- Find the best loan terms by comparing: The interest rate and processing fee are changed, based on what the bank charges. So, you can choose the best personal loan package for you based on the information available online.
- Helps you avoid wasting time: Using a calculator, checking EMI may be done in under a minute. EMI calculators are not only very easy to use, but they also give very apt results.
- You can pick how long your loan will last: think about what different loan terms and EMI amounts will do to your monthly budget. You can choose a shorter term if you’re willing to pay a bigger EMI in exchange for paying off your loan faster.
- You can pick the term length of your loan.
- You can check your EMI details: Using an EMI calculator, you can check if the bank’s suggested plan for paying back the loan is correct. Also, you can use a calculator to figure out the up-front processing cost.
Make sure to shop around and check the interest rates, fees, and conditions of repayment offered by a variety of lenders to find the personal loan that is most suitable for your current financial circumstances. We hope that you found this article to be informative. Please pay a visit to Piramal Finance for further details of this kind.