Understanding The Benefits Of A Personal Loan Calculator

Personal Loan Calculator

A personal loan is a viable credit option that helps borrowers seek immediate financial assistance. The small ticket personal loan category has witnessed significant growth by Rs.13500 crore and Rs.1.48 crore in FY21 in terms of both value and volume, respectively. 

However, while seeking a personal loan, borrowers must have a well-rounded idea regarding the loan principal they can afford to borrow and the EMI amount to be paid towards the repayment of the loan quantum. In this regard, borrowers must use a personal loan calculator to compute the EMI amount and make the borrowing hassle-free. 

Know the benefits of a personal loan calculator

Using a personal loan EMI calculator helps borrowers reap the following benefits:

  • Time-saving and accuracy: The most significant benefit of using a personal loan EMI calculator is it instantaneously displays the EMI amount, thereby saving valuable time. Moreover, this dedicated EMI calculator provides accurate results. Manual calculations are always prone to errors. Even a slight error in the monthly installments computation results in an erroneous calculation. However, borrowers can save turnaround time and get an accurate result with a personal loan EMI calculator. 
  • Easy loan comparison: Since borrowers can use the personal loan EMI calculator to try different permutations and combinations of loan amounts, repayment tenor, and interest rates by adjusting the slider, they can easily compare different loan options. Hence, they can choose the loan option that best suits their financial needs and repayment potential. Borrowers can experiment with various loan options rather than relying on agents or intermediaries. 
  • Suitable loan amount: Getting the exact EMI amount helps borrowers decide on the suitable loan amount they can borrow from the lender that won’t create a monetary burden in the long run or hinder their monthly expenses. 
  • Choose preferred repayment tenor: Borrowers can effectively alter various loan tenors and EMI pay-outs to choose a suitable tenor to help them repay the loan amount on time. Borrowers can opt for a shorter repayment tenor if they can afford higher EMI. If borrowers want to reduce the EMI burden, they can conveniently go for an extended loan tenor. Hence, borrowers must be wise to choose the right personal loan tenor that works as it affects the borrowing experience. 
  • Ensures decent credit score: Determining EMI amount before applying for a personal loan, also known as an emergency loan, helps borrowers manage their finances and plan the repayment schedule, ensuring that they will not falter on paying EMIs on time and hence maintain a decent credit score.

In this regard, borrowers must know how the CIBIL score is essential for personal lending. Being an unsecured credit option, the lender approves the personal loan application after scrutinizing the credit score. 

  • Helps plan monthly budget: As borrowers evaluate EMI pay-outs beforehand, they get to know the exact amount they have to bear towards repayment of the credit option. This helps them easily map out their monthly expenses, helping them fit the EMI liabilities. In this regard, borrowers should know how to better personal plan loan EMI repayment. 
  • Easy to access: Borrowers can access a Personal loan EMI calculator online. They just have to input the loan amount, interest rate, and loan tenor in the respective fields and get the EMI amount instantly. Moreover, it has a user-friendly interface that helps borrowers calculate the EMI amount innumerable times for free. 

Step to use a personal loan calculator

To compute monthly instalments using a personal loan EMI calculator, borrowers need to follow the mentioned steps:

Step 1: Go to the preferred lender’s official website and go to the personal loan EMI calculator page

Step 2: Then enter the desired loan amount, interest rate and repayment tenor 

The personal loan EMI calculator will display the EMI amount on entering these details. Borrowers can change the loan amount and repayment tenor to check which will fit their repayment capabilities. 

How does a personal loan calculator works?

Using a personal loan EMI calculator allows borrowers to evaluate both personal loan rates and monthly instalments. The formula based on which personal loan flashes out EMI amount is-

EMI= P x R x (1+R)^N / [(1+R)^N-1]

Here P is the principal amount, R denotes the interest rate, and n is the Monthly loan tenor.

Besides computing EMIs beforehand, borrowers should also check the pre-approved offers extended by leading financial institutions on financial products like personal loans, business loans, credit cards, etc. These offers ensure an expedited and hassle-free loan application process, making it easier for borrowers to navigate the lending process easily. Intending individuals can check the pre-approved offers by submitting their names and contact details.

To sum up, availing of any credit option comes with a repayment burden. Hence, borrowers must evaluate the EMI amount beforehand using a personal loan EMI calculator. The monthly installments decide how comfortably a borrower will sail through the repayment tenor.

Read Also: A Step-By-Step Guide to Using a Personal Loan

 

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