Getting a personal loan can be a big decision, which makes it essential to understand how much you'll need to pay back each month. An online personal loan EMI (Equated Monthly Instalment) calculator is a handy tool that helps you figure out your monthly repayments. In this post, we'll walk you through the process of how to calculate EMI for a personal loan, why it’s useful, and what factors you need to consider.
What is a Personal Loan EMI Calculator?
A personal loan EMI calculator is a handy online tool for calculating monthly loan repayments based on the total loan amount, interest rate, and tenure. It's a quick and easy way to understand how much you’ll need to pay each month without doing complex calculations manually.
Why Use a Personal Loan EMI Calculator?
When faced with urgent financial needs, such as medical emergencies, home renovations, or even planning a vacation, a personal loan can offer quick access to funds. However, before applying, it is crucial to estimate your Equated Monthly Instalments (EMIs) to ensure that the loan fits comfortably within your budget. This is where a personal loan EMI calculator becomes invaluable, offering several benefits to help you make informed decisions. Let’s explore some of the key benefits of using a Personal Loan EMI Calculator:
1. Estimates EMI For Different Loan Amounts
Firstly, a personal loan calculator allows you to input different loan amounts, interest rates and tenures to automatically generate the Equated Monthly Instalment (EMI) payable for each combination. This helps estimate the EMI liability on various loan amounts you may need.
2. Accounts for Interest Rates
Interest rates chargeable on personal loans typically start from 12%*, depending on your eligibility. EMI calculators let you check EMIs for different rates to pick the most affordable option. Even a small rate difference impacts the overall interest burden significantly.
3. Allows Tenure Comparison
Many online EMI personal calculator provides the loan amortisation schedule depicting the breakup of principal and interest components in each EMI across various tenure options. This allows you to compare and assess tenures.
4. Simplifies Decision Making
Quickly calculating multiple scenarios for loan amounts, rates, and tenures helps you identify the ideal combination aligned to repayment capacity without manual effort, enabling prudent decision-making.
5. Quick Accessibility
Finally, mobile-friendly personal loan EMI calculators offer this utility remotely through internet access on phones or laptops. This allows quick access to support loan planning from any location.
How To Use Personal Loan EMI Calculator
Using a personal loan EMI calculator is fairly simple. Here are the steps to use it effectively:
Step 1: Enter The Amount
The first step is to enter the loan amount, also known as the principal amount. For example, if you need a loan of ₹10,000,00, type that amount in the relevant box.
Step 2: Set The Interest Rate
Next, input the interest rate offered by your lender. The interest rate is usually annual, so if your lender offers a 10% rate, enter 10. The calculator will automatically adjust it to the monthly rate.
Step 3: Select The Loan Tenure
The tenure is the period over which you will repay the loan. You can choose this in months or years, depending on the calculator. For example, if your tenure is 3 years, enter 36 months.
Step 4: Click ‘Calculate’
Once you've filled in all the details, click the 'Calculate' button. The calculator will show your monthly EMI amount, the total interest payable, and the total cost of the loan.
Tips For Using A Loan EMI Calculator Effectively
Here are some of the best tips for using a loan EMI calculator effectively:
Play With Different Scenarios
Don’t stick to one set of inputs. Change the loan amount, tenure, and interest rate to see how they affect your EMI. This will help you find the best loan option.
Compare Different Lending Institutions
Use the EMI calculator to compare different financial institutions’ offers. Even a small difference in interest rates can lead to significant savings over time.
Plan For Prepayments
If you plan to prepay part of your loan, check how it affects your EMI. Some calculators offer an option to include prepayments, which can reduce your overall interest burden.
Conclusion
A personal loan EMI calculator is a powerful tool that can help an individual to make informed decisions about a loan. By understanding how much you need to repay each month, you can plan better and avoid financial stress. Remember to consider different scenarios and select a loan that best suits your financial situation.
Using this calculator doesn’t just save you time—it gives you the confidence to move forward with your loan application, knowing precisely what to expect. So, next time you consider a personal loan, use the EMI calculator first to see what fits your pocket!
FAQs
1. How can I calculate EMI using a calculator?
To calculate EMI using an EMI calculator, input the loan amount, interest rate, and loan tenure into the respective fields. Click on the ‘Calculate’ button, and the EMI calculator will instantly display your monthly EMI amount, total interest payable, and the overall cost of the loan.
2. How do personal loan EMI calculators work?
Based on a standard formula, EMI calculators compute the monthly repayment amount using the loan amount, interest rate, and tenure inputs. They automate complex calculations, offering accurate results instantly and helping borrowers easily understand their financial commitments.
3. What details do I need to use the EMI calculator?
To compute your Equated Monthly Instalments (EMIs), you would need your desired loan amount, the interest rate you are being offered, preferred loan tenure, and repayment frequency.
4. How do I calculate the interest rate?
You can check personal loan interest rates offered to you on your loan provider's website by entering basic details. Rates generally start from 12%* based on eligibility. Knowing the exact rate will help you get an accurate EMI estimate.
