In India, taking loans has become quite common in society. This has increased because many lending institutions offer good offers, low interest rates, etc. And with various easy repayment options, people choose to take loans. They take out loans for many reasons. The list includes buying a house, starting a business, paying off credit card debts, dealing with medical emergencies, etc. With many loan options available, choosing the right one for your needs can be tough.
A personal loan is an unsecured loan without collateral. However, you must understand the terms of this loan. Before signing the loan agreement, learn the interest rate, repayment tenure, and processing fees. This is where a personal loan calculator is helpful. This finance tool can help you plan and manage your loan repayment. When using a personal loan EMI calculator online, you can easily calculate the monthly EMI.
In this blog, you will find out about personal loan calculators. You will learn how to use an EMI calculator online and the eligibility criteria.
What is a Personal Loan Calculator?
You never know when an emergency might come up in your life. There are many times when you need to take out a personal loan. A secured loan doesn’t work in such situations, as it involves collateral or security. It can take weeks or months for approval. But you can get a personal loan from banks and NBFCs (Non-Banking Financial Companies) without pledging any property as collateral. In such cases, it is critical to be fully informed about EMIs. Study to know if you can afford to pay for them. This is where a personal loan calculator comes in handy. A personal loan EMI calculator allows you to estimate the monthly payments for your personal loan. You can calculate the total interest payable on the loan for the entire tenure.
How Do You Use a Personal Loan Calculator Online?
Using a personal loan calculator online is easy. All you have to do is fill in the following details:
- Loan amount
- Interest rate
- Repayment tenure
After this, the calculator automatically calculates your monthly EMI. For example, if you choose a loan amount of INR 3 lakh, it has a 12% annual interest rate for a three-year term. The personal loan EMI calculator will show your monthly EMI. On the next page, you can see the total interest payable over the entire loan tenure.
You can also change the variables and see how it affects your EMI. This helps you get affordable loans without disturbing your monthly budget. It eases your monthly repayment process.
The steps to be followed to use our online personal loan EMI calculator are as follows:
- Visit our website and click on the ‘EMI calculator’ option.
- Enter the final loan amount you want to avail.
- Enter the applicable interest rate for the loan. It ranges from 10% to 20%.
- Select the repayment period from 12 months to 60 months.
- Click ‘calculate’ to get your monthly EMI and the total interest payable.
How to Check Personal Loan Eligibility?
Eligibility is a crucial factor in obtaining any loan. The lender will assess your eligibility based on your income, credit score, employment status, and repayment history. Below are the general eligibility criteria for availing of a personal loan:
- You should be between 21 and 60 years old.
- Your minimum monthly income should be at least INR 15,000.
- A good credit score (more than 700) is necessary. You can get personal loans at competitive interest rates.
- You should be employed consistently for at least six months. It shows a stable income record. This vouches for your ability to repay the loan amount.
An online personal loan calculator helps you check your eligibility. Now, efficiently plan loan repayment. It’s important to avoid any default in payments.
What Factors Influence Your Personal Loan EMI?
When you use a personal loan calculator, three main factors will affect the EMI amount:
- Loan amount: The higher the loan amount taken, the higher your EMI will be.
- Interest rate: Higher interest rates will lead to a higher EMI amount.
- Duration to repay the loan: A longer length of time to pay back the loan means lower EMIs but more interest paid on the loan overall.
- Existing debt: If you already have other loans, your EMI amount may increase. It will be deducted from your total debt repayment capacity.
- Credit score: A good credit score can help you get a lower interest rate and, in turn, lower EMIs. On the other hand, a poor credit score can result in a higher interest rate and EMIs.
- Age and income: A higher income and a younger age can increase your eligibility for a loan and result in lower EMIs.
- Type of interest rate: The type of interest rate, whether fixed or floating, will also affect your EMI. A fixed interest rate means that the EMI stays the same over the life of the loan. A floating interest rate, on the other hand, means that the EMI can change over the life of the loan.
- Change in interest rate or loan tenure: This factor only applies if you have a floating interest rate. A change in the interest rate will affect your EMI, as will a change in loan tenure as the EMI is recalculated.
It is important to carefully consider these factors before availing of a personal loan and to use an EMI calculator to plan for timely loan repayment. Use our online personal loan EMI calculator and apply for a loan now!
Tips to Improve Personal Loan Eligibility
A personal loan is easily accessible, provided applicants satisfy lenders’ personal loan eligibility standards. But there are specific steps you can take to enhance your chances of getting a personal loan:
- Maintain a good credit score by promptly repaying all your debts.
- Keep a stable job with a steady flow of income.
- Avoid multiple loan applications, as they may lower your credit score.
- Keep a healthy savings account balance, as it shows financial stability to lenders.
Follow these steps carefully. You can easily improve your personal loan eligibility for attractive interest rates and repayment terms.
An online EMI calculator helps determine your monthly instalments and the total interest payable on secured and personal loans. The steps involved in using the calculator are pretty simple and help you get an overview of your personal loan amount, interest rate, and tenure before finalizing the loan. To read more interesting blogs on managing personal finances, you can go through the blog section of our website. Visit the Piramal Finance website to explore loan options and other products and services.