Personal Loan EMI Calculator & How Can I Use it Effectively
Banks and non-banking financial institutions provide access to Personal Loan EMI Calculator online on their websites. Using the same, the customer can compute his/her repayment. How does it help? You can plan your repayments and compare loan offers using the Personal Loan EMI Calculator. Read this page for more information on this.
Let’s Define Personal Loan EMI Calculator
An EMI Calculator works in the formula of EMI = P × R × (1 + R)N/((1 + R)N – 1). It will require your loan amount, interest rate and repayment period to compute the EMI. Once you insert the details, in no time, the EMI will be generated. And when you already know your EMI, you can adjust your monthly budget, so there won’t be any stoppage in loan repayments. It helps in making repayments easier.
Choose a suitable payment method and enjoy hassle-free repayment of your borrowed amount. So, without knowing much of the burden of the repayment your loan will be closed and a healthy credit status is maintained. Those who don’t use the Personal Loan EMI Calculator before applying for a loan might face difficulty in repayment. As the EMI could turn out to be more than their expectations. So, use the calculator and save yourself from these surprises.
Avoid Making Bad Decisions Using Personal Loan EMI Calculator
With this tool, choose a suitable lender for your loan. How? Do a personal loan comparison using the calculator and see which lender offers you a loan at an affordable payout.
See the below example for a better understanding –
Karishma has been looking for a loan and has shortlisted two lenders – one is offering a loan of INR 4 Lakh at 15.00% while the other offers INR 3 Lakh at 14.00%. She doesn’t know how to decide between the two, so she uses a Personal Loan EMI Calculator.
She checks the EMI offers of lenders one by one. First Lender 1 with loan offer INR 4 Lakh, interest rate 15.00% per annum and a tenure of 12-60 months. Her EMI will be a minimum of INR 9,516 and a maximum of INR 36,103.
On the other hand, Lender 2 offers INR 3 Lakh, an interest rate of 14.00% per annum and a tenure of 12-60 months giving her an EMI option from INR 6,980-26,936.
As you can see from the above example, lender 2 offers more easy and affordable repayments compared to lender 1.
Plan Foreclosure with Personal Loan EMI Calculator
Banks and NBFCs give you the option of personal loan foreclosure. With this, the borrower doesn’t have to pay the remaining interest. Yes, you’ll save the interest repayment with the foreclosure option. Check out the below example and know how it is done.
Before borrowing a personal loan of INR 7 Lakh at an interest rate of 11.25% per annum, Siddharth uses the EMI calculator. With the help of the EMI Calculator, he knows that his EMI will be INR 15,307 for a five-year tenure. So, he plans foreclosure.
An amortization schedule is displayed when you use the Personal Loan EMI Calculator. With this, you can know your loan balance after each year of continuous repayment. According to that Siddharth chooses to foreclose his loan. The yearly loan balance as per the calculator is as follows –
- At the end of the first year INR 5,89,481
- Second-year end INR 4,65,867
- After completion of three years of repayment INR 3,27,607
- End of the fourth year INR 1,72,964
Siddharth decides to close the loan after the end of the third year, which means he needs to pay INR 3,27,607 to the lender. By doing so, he can save up to INR 85,188 in personal loan interest rate.
To accumulate such a lump sum amount, invest your money in different tools like mutual funds, FDs, etc. whatever that can help you get INR 3,27,607 by the end of the third year.