Personal loans have become one of the most popular and fastest-growing credit segments in the country. This financial product has continued to grow and has recorded 13.5% year-on-year growth in March 2021. The reason for this growth can be attributed to the borrower-friendly benefits of this financial product.
Additionally, an Online Personal Loan EMI Calculator helps a borrower figure out the monthly EMI outflow against a loan amount. A clear idea of the EMI estimate helps in better loan repayment planning and efficient financial management.
Easy steps to calculate EMI using personal loan interest rate calculator
Online calculators like these operate on the conventional formula of EMI. It only takes a few seconds to compute the monthly installment through this tool.
Here’s how you can calculate your monthly EMI with an online interest rate calculator:
Step 1: Visit the website of your preferred lender and open this online tool
Step 2: Provide the loan amount and tenor as per your preference
Step 3: Put the interest rate provided to you
Step 4: Click on ‘calculate’ or tap on EMI payable
You can view the monthly installments, interest outgo along with the total amount payable instantly.
In addition to knowing how to calculate the EMI outflow, borrowers should know the benefits that such personal loan calculators come with.
Top advantages of using an online personal loan calculator
- Accurate results
Individuals should calculate EMIs beforehand to manage their finances efficiently. While opting for these unsecured loans, one needs to make sure that the estimations are accurate. The manual calculations can be both tedious and erroneous. But an online interest rate calculator is programmed to display accurate results in split seconds.
The formula that a personal loan interest calculator follows is as stated below.
EMI= P × r × (1 + r) n/((1 + r)n – 1)
Where, P = Principal,
R = interest rate,
N = tenor
So, even if one knows how to calculate personal loan EMI, the chances of getting incorrect results are quite high. However, with an online tool, you can avoid such errors efficiently.
- Compare interest rates easily
Individuals need to conduct thorough market research to avail better interest rates on their personal loans. This online interest calculator makes the process more convenient and hassle-free. Applicants can compare among different lenders and choose the one offering the most competitive rates.
To find the most suitable deal, one simply has to enter different rates while keeping the tenor and loan amount constant.
- Estimating the correct tenor
Another essential benefit of a personal interest calculator is that it helps in deciding a suitable loan tenor. Since loan tenor plays a pivotal part in determining the total outstanding, one can take the assistance of these online devices to find a reasonable period. Prospective borrowers can enter multiple values too in the respective tab to see how a change of tenor affects the total outstanding figure.
For instance, you take a personal loan worth Rs. 10 lakh at an interest rate of 15% for 36 months. The EMI outflow would stand at Rs. 34,665, and interest payable is Rs. 2,47,956.
Now, if the tenor is increased to 48 months, the EMI would drop to Rs. 27,831. However, the interest payable goes up to Rs. 3,35,870.
- Estimating the borrowing cost
Besides knowing the monthly payment, borrowers can also use an interest calculator to find the borrowing cost. Resultantly, prospective debtors can then plan their finances accordingly and make suitable decisions while availing of an online emergency loan of this kind.
- Access to a loan amortization schedule
Another notable advantage of using an online calculator is that it provides access to a loan amortization schedule. This list includes a detailed break-up of the payable EMIs, and how they progress throughout the tenor. Access to this list also aids in planning repayments.
Besides offering free access to such online devices, leading financiers like Bajaj Finserv also provide pre-approved offers that streamline the loan application process. These offers are available on credit instruments like personal loans, credit cards, business loans, etc. Intending borrowers can check their pre-approved offers by submitting their essential contact details.
Hence, a personal loan interest calculator helps in better debt and finance management. One should, therefore, use this online tool before applying for a personal loan to make an informed decision.
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