Personal Loan is an important financial aid for almost all middle-class families in India who are struggling to meet up their outstanding bills or simply finding ways to make a high-cost purchase without having enough saved up in their savings account. An unprecedented emergency can hit up a family anytime and anywhere, therefore, it is important to keep an open mind about loans such as these. Now-a-days, with advances in technology, you can apply for a personal loan online. It is a hassle free and the most convenient way to apply for a loan followed by minimal documentation and quick approval if you are short on time.
Before you avail a personal loan online, you must check the eligibility criteria, prepare the documentation that might be required and also try to secure it at the cheapest interest rate possible. You must also be cautious before you apply for the loan and check whether the terms and conditions stated by the bank or financial institution suit your financial condition. You can do this by comparing the loan schemes available and carefully determining the loan amount required by you which would not hurt your creditworthiness in the future and is easily repayable. Hence, you must calculate the equated monthly instalments or EMI on your loan as it will help you plan out your finances beforehand and in turn help you manage the funds properly.
The mathematical formula to calculate the EMI is:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where P is the principal or loan amount, R is the interest rate per month and N is the number of monthly instalments. Bad at Maths? You can visit any online personal loan EMI Calculator available and leave the maths upon it.
All you have to do is enter the loan scheme details, which includes your preferred loan amount, interest rate being offered, repayment tenure, and processing fee. Hit the button that says “Calculate” to check your EMI. The lowest applicable EMI per lakh for a tenure of 7 years at the minimum applicable interest rate is roughly about Rs.1,599. The result will be followed by an amortisation table, which is designed to give you a holistic and detailed break-up of your repayment obligations and schedule.
Factors That Can Affect The Personal Loan Emi:
- Loan Amount: The loan amount is directly proportional to the EMI payable. Usually, the maximum loan amount that you can apply for is determined by the bank based on your repayment capacity, relationship with the lender, and numerous other factors. Even then, you must be careful with the amount of loan and be careful it doesn’t exceed the repayment limit you have set.
- Rate of Interest: In this case, too, the higher the rate of interest, the higher the EMI. The bank will determine your loan’s interest rate based on a number of factors such as your Income, your credit history, repayment capacity, etc.
- Loan Tenure: The loan repayment tenure is inversely proportional to the EMI. The longer the tenure, the lower the EMI. However, with a longer tenure you will end up paying more as interest. The repayment tenure usually ranges between 12 months to 84 months.
Benefits Of Using A Personal Loan Emi Calculator:
- Compare loans: You can easily compare loan schemes by simply entering a fixed loan amount and the repayment tenure, then varying the interest rate and processing fee depending on the rates fixed by the bank or financial institution. That will give you a holistic view concerning the total cost of the loan. This will assist you in determining the cheapest loan plan.
- Saves time: Calculating EMI barely takes a few seconds when you are using a personal loan EMI calculator. Also, EMI calculators are effortlessly convenient and 100% accurate.
- Choose your preferred loan tenure: You can vary loan tenures and compare your EMI to see which one is better suited for your financial situation. If you are okay with paying higher EMI and would like to close your loan early in order to reduce the interest amount you would be paying, go for a shorter tenure. Otherwise, you should opt for a longer tenure.
- Check your repayment schedule: Personal loan EMI calculator gives you a complete break-up of your repayment schedule both graphically and numerically. That way you can get a clear idea as to how much you would have to pay as interest and also analyse your principal outstanding.
- Verify EMI information: You can easily validate your repayment schedule as extended by the bank. Apart from that, by using a calculator you can also calculate the processing fee that you have to pay upfront coupled with the GST which is usually deducted from the sanctioned loan amount.
A personal loan and its interest rate can get less scary with a personal loan emi calculator, Hit those buttons now!