The personal loan segment doubled in terms of value from Rs. 75,000 crore to Rs. 1.47 lakh crore in December 2021. Moreover, the steep rise of the personal market is anticipated to grow by 10% from FY2015 to FY2025. The notable shift to this small-ticket credit option can be attributed to the versatility of personal loans, helping individuals meet their financial requirements in no time.
However, before availing of a personal loan, borrowers must evaluate the monthly instalments to determine whether they can afford to repay the loan principal comfortably or not. Hence, an online personal loan EMI calculator is recommended to evaluate the EMI obligations and easily sail through the repayment tenor.
Know How To Calculate Personal Loan EMI With A Personal Loan EMI Calculator
Deciding on the loan principal and repaying it has become convenient with the availability of a personal loan EMI calculator. Here are the steps that will guide you in calculating your loan EMI amount:
Step 1: Visit the preferred lender’s official website and head to the personal loan EMI calculator page
Step 2: Enter the loan principal, interest rate and loan tenor
You will then see the EMI amount displayed on the screen. You can conveniently change these three variables and instantly get the respective EMI amounts.
The personal loan EMI calculator follows this mathematical formula:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where P determines loan principal, R suggests interest rate, and N is the loan tenor.
For instance, if a borrower wants to avail of a loan principal of Rs. 5 lakh, at an interest rate of 13% for a repayment tenor of 3 years, they are liable to pay an EMI amount of Rs. 16,847. The overall payable interest is Rs. 1,06,491, and the total payable amount is Rs. 6,06,491.
Know The Benefits Of Using A Personal Loan EMI Calculator
A personal loan EMI calculator offers several benefits to the borrowers:
- Comparison between different loan options: On entering different loan amounts, loan tenor, and interest rates by adjusting the slider, you will get different EMI amounts. Hence, one can easily compare different loan options and opt for a lender offering the lowest interest rate on a personal loan.
- Selection of the right repayment tenor: By knowing the EMI amount using the personal loan EMI calculator, borrowers can easily find the right personal loan that works for them. If borrowers can afford a higher EMI amount, they can go for a shorter repayment tenor, which reduces their total payable interest.
- Detailed amortisation schedule: Borrowers can easily access the repayment schedule. The detailed EMI break-up will help individuals understand the number of EMIs they have throughout the repayment tenor and better plan personal loan EMI repayment. Furthermore, this schedule lets one view the principal amount and interest component separately.
- Quick and accurate results: Computing EMI liabilities through manual calculation is tedious and susceptible to errors. However, using an EMI calculator provides borrowers with accurate results.
Know How To Get A Personal Loan
Borrowers can follow the below-mentioned steps to apply for a personal loan:
Step 1: Go to the official website of the preferred lender and select personal loan from the product page
Step 2: Now click on ‘Apply Online’ and fill in the application form with the necessary details
Step 3: Submit KYC papers and income-related documents
Step 4: Select the loan amount and submit the online application form
On submitting, a representative from the lending institution will contact you and process the application.
However, borrowers must know the eligibility criteria before applying and keep the required documents handy while applying for a personal loan.
Besides meeting eligibility criteria and computing EMI beforehand, borrowers should also check the personalised pre-approved offers extended by several financial institutions on various financial products like personal loans, business loans, credit cards, etc. These offers simplify the lending process and reduce the hassles of documentation. You can easily check the pre-approved offers by submitting your name and contact detail.In conclusion, a personal loan EMI calculator is an effective online tool that helps you know about the monthly installments in a split second. Not computing EMI beforehand may lead to a financial burden on the borrower. The online tool helps borrowers understand whether they can afford the monthly payments or not and make the borrowing worthwhile.
Read Also: Top 4 Benefits Of Using A Personal Loan EMI Calculator
