If you want to apply for a personal loan, then you should use an EMI calculator before you begin applying. An EMI calculator can make loan comparisons and financial planning much easier for you. Every bank or NBFC makes an EMI calculator available on its website or app.
With an EMI calculator, you can check different loan amounts and tenures to see what you can afford. This way, you can ensure that your other financial obligations are also taken care of. An EMI calculator helps you plan a smooth and disciplined fiscal life. Using a personal loan EMI calculator is one of the best ways to get a complete picture of your loan needs.
Personal Loan EMI Calculator Components
An EMI calculator displays the total loan amount you pay as per your chosen principal sum and tenure. Here are some terms that will help you use an EMI calculator better:
- Principal Amount: This is the actual loan amount that you borrow.
- Interest Amount: This is an annual rate that is charged on your principal sum.
- Total Loan Amount: The total loan amount is the sum of your principal loan amount and the interest amount.
- Outstanding Amount: This is the balance that remains to be prepared after every EMI payment.
Factors that Affect Personal Loan EMIs
You should also understand the factors that affect the length and amount of your EMIs before you choose these terms.
If you opt for a higher loan amount, the EMI will also be higher. However, the lender decides the loan amount. Apply for a loan amount that you can easily pay off. Also, check your loan eligibility before applying for a loan.
When using an EMI calculator to calculate personal loan EMIs, you need to know that the higher the interest rate, the higher the EMI. Prefer the lender who offers lower interest rates on personal loans. The factors that determine the interest rate are income, credit history, and repayment capacity. A credit score above 700 will land you good interest-rate offers.
The longer the loan tenure, the lower the EMI amount. But in this case, the interest rate on your loan is higher.
How to Use an Online EMI Calculator for Personal Loans?
Using an online EMI calculator for personal loans is a three-step process:
- Step 1After clicking on the personal loan EMI calculator on the lender’s website, use the slider to select the amount.
- Step 2Then, enter the interest rate offered to you by the lender. You cannot select the interest rate at your discretion. It is set by the lender.
- Step 3Finally, select the loan tenure. Now, the monthly EMI amount will be displayed. Say you want to apply for a personal loan of Rs 15 lacs with a term of 5 years, and the interest rate offered by the lender is 12%. You can enter all the details in the EMI calculator for personal loans. In seconds, you will get the exact monthly EMI amount. The calculator displays a table depicting your periodic loan repayment schedule. It contains details about the rate you are required to pay as interest and the portion of your EMI that goes toward the principal amount. This breakdown of interest and principal explains the repayment process in a more accessible way.
Benefits of a Personal Loan EMI Calculator
- Ease-of-UseAn EMI calculator is one of the easiest ways to gauge your total loan amount. All you need to know is the interest rate, amount, and tenure. Within seconds, the monthly EMI calculation is displayed.
- Accurate ResultsThere are fewer chances of errors when assessing your personal loan amount when you use an EMI calculator. Also, the tabular format of the loan breakdown is easy to understand for anyone.
- Unlimited UseYou can use a personal loan EMI calculator as many times as you like. There are no restrictions, as it is available 24×7. You can even try many combinations of loan tenure and amount to arrive at a decision. This makes money planning easier.
- Time-SavingUsing an EMI calculator is better than calculating interest rates manually with a formula. It is easy to use and provides 100% accurate results. There is no chance of ambiguity with the results of an EMI calculator.
- Help with financial planningYou can find out the exact loan repayment timelines by using a personal loan EMI calculator. Not only that, but with this information, you can also assess your overall monthly inflow and outflow.
In times of financial hardship, a personal loan is the most common form of finance. So, a personal loan EMI calculator is a quick and optimal tool to easily understand the EMI payments of your loan. So, whenever you need to apply for a loan, this is the tool you turn to. You can find the EMI calculator for personal loans on any lender’s website. You do not need any fancy technology to use an EMI calculator.
Piramal Finance is a one-stop shop for all your financial needs. Here, you can get a personal loan with no foreclosure or prepayment fees. You can apply for loans ranging from Rs 1 lakh to Rs 10 lakh. A team of experts is at your disposal to ensure smooth loan processing. You can check out their website for a personal loan EMI calculator and find out your monthly EMI amount in seconds. If you need to learn more about such topics, Piramal Finance also has a range of financial blogs for you.