When you search for personal loans, you come across the term EMI calculator. If you haven’t had a loan before, this might be new for you. It is a calculator. In just one click you can find your EMI. To use this calculator, you need to mention the loan amount, interest rate and other details of your loan. Now that you have entered the loan details, click on ‘Calculate’ to see what would be your EMI. If it is not what you have expected, change the personal loan values inside the calculator. Learn more about the Personal Loan EMI Calculator in the article below.
The formula of the Personal Loan EMI Calculator
Using the below formula, the tool generates your EMI –
EMI = P × R × (1 + R)N/((1 + R)N – 1)
If you’re good at math, it won’t be a problem for you to use this equation to find the EMI amount. But, not everyone is good at math and this tool also saves your time for pen-paper calculations.
What are the Benefits of Using the Personal Loan EMI Calculator?
It is difficult to choose the repayment period. But this won’t be your problem when you use the calculator. With its help, you can see when the interest or EMI payment goes above your budget.
The purpose of borrowing a personal loan is to meet a financial need. But this doesn’t mean you have to compromise on your daily expenses. A best personal loan helps you manage both household and personal expenses.
Check out the calculator benefits below –
Low EMI Payment
Using the calculator, you can find a plausible EMI. Upon getting the desired result from the tool, check the tenure. Choose such tenure, so your repayment will be affordable as the calculator has shown.
Know Your Total Interest
You don’t know the exact number you will be paying for a personal loan. But with the help of the EMI Calculator, you can know the same. Check out the result and see when your interest payment is less. Once you find such a period, opt for the same for your loan repayment. This way, the interest payout won’t be much on your loan and you could save some money.
Early Closure
You can close your loan early as many lenders give prepayment opportunities. In this, the borrower can pay off the loan balance, so he/she doesn’t need to pay the remaining interest. There are some charges applicable to it, so incorporate them while calculating your savings. The personal loan EMI calculator lets you know when the loan balance will be affordable enough that you can pay it in a lump sum.
After deciding on the period of prepayment, start investing your money. Because your savings will grow and help you achieve your loan balance if you invest them in products like mutual funds, fixed deposits, etc.
Illustration of the Personal Loan EMI Calculator Usage
Sameer’s mother is diagnosed with a chronic illness and he needs a lump sum of INR 5 Lakh. So, he began searching for loan products. He came across a personal loan EMI calculator. Post inserting the details like –
- Loan amount – INR 5 Lakh
- Interest rate – 11.00% per annum
- Enure – 36 months
He presses the ‘Calculate’ button.
The generated result is as follows –
- EMI – INR 16,369
- Interest Amount – INR 89,297
As you can see Sameer’s EMI is affordable and the interest payment is less than one lakh. So, it is a win-win situation for him. Now, he can meet the hospital expenses for her mother’s treatment and can afford the loan repayment in his monthly salary.
So, if you want to find the best personal loan, use the EMI calculator beforehand.