in

Personal Loan EMI Calculator – Here’s All You Need to Know About

emi calculator

One of the best ways to assess your borrowing decisions is to avail a personal loan EMI calculator. When availing of an unsecured advance like a personal loan, a borrowing assessment is a must for any individual. It is because even though these advances are easily available and do not require one to make extended arrangements, improper management of the loan can result in financial trouble for the borrower typically because the rates are a notch higher for these loans than other advances and can create a high repayment liability if not repaid in time.

Many financial institutions today provide these tools that help with elaborate borrowing assessments so that you can assure the suitability of your loan as per your financial standing. Let’s check out some pertinent details about the financial tool to know when availing of funding.

What is a Personal Loan EMI Calculator?

A personal loan EMI calculator is a financial tool designed for self-help usage. Thus, anyone borrowing the advance can use the calculator to assess how much they should avail of as a personal loan. These are accurate financial tools and bring out quick results so that borrower makes easy borrowing decisions within no time.

These tools have a simple user interface, which is easy to understand. This makes it easy to use for anyone planning to avail of the loan irrespective of their skills. The results they calculate are quick too and displayed immediately after you have entered the required loan-related information.

Most reputed financial institutions extending a personal loan in the market today provide these self-help tools for free use. So, anyone willing to assess their borrowing decisions can access these calculators from the selected lender’s website online and use them without much ado.

How to Use an EMI Calculator?

It is easy to use a personal loan EMI calculator as you need to make a few entries only. Once you have accessed the calculator, you would need to make the following entries.

– Principal value or the loan amount you seek to avail

– Rate of interest levied by the lending institution you selected

– Repayment tenure that you deem suitable for loan

After all these entries are made, you can check out the results to make suitable borrowing assessments, They include –

– The EMIs you would need to pay throughout the loan tenure towards complete repayment of the advance

– The total interest payable on your personal loan as per the interest rate applicable

– Total loan liability you would owe your lender by the end of your repayment term

The calculator is fast and accurate, ensuring quick computation of the desired results. It uses a set formula for such computation, which goes as –

EMI = P x R x [(1+R)^n/(1+R)^n – 1]

In this formula, R refers to the rate of interest applicable on the loan, P goes for the principal or the loan amount availed, and n represents the tenure of the loan expressed in months. So, if you avail of the advance for a term of 3 years, the tenure value entered in the personal loan EMI calculator would be 36 months.

Use it before you apply for a personal loan to make a wise borrowing decFloanision accordingly.

How to Optimise?

While a personal loan EMI calculator is a simplistic tool with few results, its usage extends far beyond just EMI computation. When using the financial tool, you can keep the following things in mind to optimize the computations usage.

– When assessing the affordability of your personal loan EMIs, you must know how the loan amount and tenure entered impact the EMIs as both affect the installments differently.

– When entering the loan amount, know that its increase or decrease has a direct impact on your EMI payable. Thus, the latter increases with a loan amount increase and vice versa.

– As against the loan amount, your tenure entered has an inverse impact on the EMIs payable. Thus, if you choose a long tenure, it will bring down the EMIs. Conversely, a shorter tenure means higher EMIs.

– However, an increase or decrease in both loan amount and tenure would result in an increase or decrease in the total interest payable simultaneously.

 The personal loan EMI calculator also displays the amortization schedule, which provides a detailed break-up of the principal and interest component of each EMI payable. You can use the schedule to make repayment decisions appropriately for further savings on your loan repayments.

This post was created with our nice and easy submission form. Create your post!

What do you think?

Written by Alinamass

I am a professional writer.

Comments

Leave a Reply

Your email address will not be published.

Loading…

0
marketing

5 Ways Marketing Has Evolved in the Past 5 Years

Is It Possible to Break Bad Old Habits? If so, How?