Taking a personal loan can help you simplify a range of expenses, be it planning a wedding, paying for a medical emergency or renovating your home. However, just as is the case with any other loan, an important factor to keep in mind when taking a personal loan is the EMI that you have to pay throughout the tenor. This determines the affordability of the loan and hence is a crucial part of your borrowing experience. Fortunately, you can use a personal loan calculator to forecast your EMIs before you borrow to know your repayment responsibility for the tenor of your choice. You can calculate this by taking into consideration the principal amount, rate of interest, and the repayment tenor. To find out more, read on.
How to calculate your personal loan EMI?
Calculating your EMI places you in a better position to know the exact amount that you are required to pay the lender every month and so you can plan your expenses accordingly. While you can manually calculate EMIs using this formula, E= P*r*(1+r)^n/((1+r)^n-1), where ‘E’ denotes EMI, ‘P’ denotes the principal, ‘r’ denotes the monthly rate of interest and ‘n’ is your chosen tenor, it’s easier and quicker to use an online personal loan calculator that offers results in seconds.Most lenders provide you with a personal loan calculator on their website so that you can make a smart borrowing decision. For instance, when you opt for a personal loan from Bajaj Finserv, you can view your EMIs in under a minute by following these simple steps:
- Use the slider to adjust the principal amount you wish to borrow or simply enter the number in the field provided
- Next, use the slider or the input field to enter the tenor you want to borrow the amount for
- Lastly, feed in the interest rate that you’re required to pay for your personal loan
- Once you press ‘Enter’ you will be able to view the loan EMI, total interest payable and total repayment (principal and interest)
This means that if you are looking to borrow Rs.10 lakh for a tenor of 40 months with 15% as your rate of interest, entering these values into the calculator will show that your EMI is Rs.40,278, total interest payable is Rs.1,96,789 and total amount due is Rs.11,96,789.Now that you know how EMIs are calculated, here’s a look at how having this information helps you.
You can pick the right loan amount
Having an estimate of the loan’s principal amount is not enough. This is because the more you borrow, the more you have to pay as interest. By entering the personal loan amount that you have in mind, you can determine your EMIs and accordingly reduce the principal if need be, as per your financial capabilities. Similarly, you can view the maximum amount that you can borrow and make a decision accordingly. You can avail of a loan amount of up to Rs.25 lakh from Bajaj Finserv’s Personal Loan. Not only this, but you can also have it disbursed to your account within 24 hours.
You can choose the best loan provider
By entering the principal amount, the tenor that you have in mind and the interest rate levied by various lenders, you can see how your EMI changes. This exercise will help you identify the best loan to borrow in terms of the interest rate and allow you to successfully keep your costs to a minimum. For instance, comparing Bajaj Finserv’s Personal Loan with that of others will show how Bajaj Finserv offers financing of up to Rs.25 lakh at extremely low personal loan interest rates. Moreover, via its Flexi Personal Loan facility, flexible repayment tenor and online application and loan management, it ensures that the loan offers maximum convenience at every step of the way.
You can select the ideal repayment tenor
As you try various combinations of principals and tenors, you will be able to identify the impact that these two parameters have on the EMI. In turn, you will be able to adjust them to arrive at the most suitable figure. When it comes to the loan’s tenor, entering various figures will show you that a long repayment tenor will result in lower EMIs but increase your interest payment on the whole. On the other hand, a shorter repayment tenor will result in heftier EMIs, while allowing you to clear debt quicker. Therefore, by using the personal loan EMI calculator you can arrive at a balance between the two and keep your out go to a minimum, without straining your budget. Apart from the personal loan EMI calculator, also be sure to use a personal loan eligibility calculator to determine whether you’re a good candidate for the loan. Once you’re sure, make it a point to check your pre-approved offer to enjoy faster loan processing and quick disbursal.
