One of the major mistakes that people often make when going for a personal loan is to not have an estimate about their monthly installments. Yes, monthly installments are something that individuals need to pay every month to repay the personal loan. Sometimes, this amount is beyond their repayment capacity which makes it harder for them to pay accordingly. This is why lenders encourage and advise you to always use the Personal Loan EMI Calculator before making the final decision about your loan.
As you can see from its name only, this tool helps individuals to get an idea about the Equated Monthly Installments before going for a personal loan. When you are going for a personal loan, you have a certain amount in your mind that you need. The EMI Calculator will tell you the exact amount that you will need to pay every month towards repayment of your loan. Suppose that you chose a 5-year loan. For this, you will need to pay 60 EMIs. EMI consists of a portion of both the principal amount and interest amount, and with this tool, you can know which is which.
In this article, we will be telling you about the working of the Personal Loan EMI Calculator and the role of Personal Loan Interest Rates in it. Keep reading to know more!
Details needed to Use Personal Loan EMI Calculator
Like every other Calculator, this tool also works on inputs. To know the EMI amount, you will be needing a few details, and when you put it into that, you will get the results. These results are Required Loan amount, Personal Loan Interest Rate, and Required Months.
Let’s talk about the Required Loan amount first. Each lender has certain eligibility criteria about the loan amount according to which you will get the final loan amount. One of the main things upon which your loan amount depends is your monthly income. The higher the monthly income, the higher will be your loan amount.
Coming to the Personal Loan Interest Rates, it is one of the most popular factors of the tool. Simply put, your EMI depends on it. The higher the interest rates, the higher you will be your EMI amount, and vice versa. That’s why it is advised to opt for a lower rate. But to choose a suitable rate for yourself, you should know those important factors that affect your rates. Some of them are Monthly income, existing obligations, employment type & History, location, and most importantly credit score.
The last thing that you need to put into the tool is the tenure which is the number of months for which you will pay the EMI amount. As soon as you will put it, you will get the EMI amount, interest outgo, and total payable amount.
Use of Personal Loan EMI Calculator for different purposes
Do you know that you can use the Personal Loan EMI Calculator for a wide range of purposes in case of a personal loan? No? Well, there are a few things that you can do with this tool. You can choose suitable interest rates for you. You can have an estimate about the savings when you go for a Personal loan balance transfer facility or when you prepay the loan. Other than this, you can also have an idea about the changes in your EMI amount when you choose a shorter tenure or a longer tenure. One of the best things about the Personal loan EMI Calculator is its flexibility with which you can put endless numbers into it till the time you get the desired results. Also, anybody can use the tool with basic knowledge and get fast results.