Personal Loan EMI Calculator: Estimate Your Monthly Repayments
Get up to ₹20 lakhs personal loan @10.99% interest rate. If this message makes you think, what will the EMI payable be? How do I calculate EMI for a personal loan? Then, you might want to read this guide on personal loan EMI calculator. Today, we’ll cover how to use this tool and estimate your monthly repayments for better financial planning.
What is personal loan EMI?
Personal loans are unsecured loans that you can avail of without having to pledge collateral from any non-banking or banking financial institution. Whether it’s a commercial, foreign, or small finance bank, you can borrow funds from these institutions to fund a trip, make wedding arrangements, pay a downpayment on a car, and so on.
These loans have equated monthly instalments, or EMIs, which are the fixed amounts you need to pay each month on the specified date as repayment towards the principal and the interest amount. It is one of the most preferred loan options as it requires minimal documentation, provides flexibility of usage, and takes comparatively less processing time. It also has a shorter repayment tenure, which ranges from one to five years.
What is a personal loan EMI calculator?
It is a tool that helps you automatically calculate the EMI amount of a personal loan depending on the principal amount (loan amount), tenure and interest rate. It offers borrowers a quick and simple way to plan the flow of money well in advance so they don’t run short of cash.
A Personal Loan EMI calculator is available online. You need to enter the loan amount, tenure, and the percentage of interest. Once you’ve added these details, the tool will show you the EMI (Equated Monthly Instalment) amount. This is the sum that you must pay to the bank every month to repay the loan.
The working of personal loan EMI calculator
Here’s how the tool calculates the EMI amount:
Formula
EMI amount = [P x R x (1+R) ^ N] / [(1+R) ^ N-1]
P = Loan amount
R = Interest
N = Tenure
P, R, and N are variables. So, a change in any of these elements will result in a change in the EMI amount.
Let’s understand this with an example:
P = ₹20,00,000
R = 10%
N = 5 years
EMI payable = ₹42,494
What are the benefits of a personal loan EMI calculator?
Here are the reasons why personal loan EMI calculators are so beneficial:
- Simple: The interface of personal loan EMI calculators is quite user-friendly and easy to use. You just have to add requested details to get the amount. This helps you create a budget outline to plan all your monthly expenses with these repayment instalments.
- Accessible: The personal loan EMI calculator is free to use. You can access the tool online on the go and get the desired calculations done in a jiffy to plan your budget for monthly repayments.
- Saves time: The manual working of calculating EMI is quite time-consuming. But when using a calculator, you don’t have to do complex calculations. In fact, many providers also showcase amortisation distribution, which gives you a monthly or yearly breakdown.
- Accurate: Manual calculations can have errors, and wrong results may have a direct impact on your planning. But this challenge gets completely eliminated with EMI calculators, which are auto-generation tools.
- Easy comparison: With a personal loan EMI calculator, you can compare personal loans offered by different lenders with ease. You can evaluate the options, make a plan and choose a loan that works best for you.
- Flexibility in making variations: You can increase or decrease the principal amount and see what kind of loan fits you. This flexibility allows you to find the most suitable repayment plan.
Endnote
Many lenders, like Unity Small Finance Bank, offer personal loan EMI calculators, which pave the way to ensure precision and clarity when applying for a personal loan. For quick assistance, there is also customer care support that you can contact to get a personalised guide. So, make the most of this readily available tool to plan your finances better when applying for a personal loan.
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