The personal loan segment has expanded at a notable rate of 12.3% in FY2022, compared to 9.6% in FY21. This increasing demand for personal loan can be attributed to its versatility. It is an ideal way to consolidate and pay off existing debt and fund various financial requirements.
The EMI pay-out is integral to any borrowing, and it must be computed at the earliest. With the help of a personal loan calculator, borrowers can conveniently compute EMI amount, overall interest payable and total payable amount. This will help them get a clear idea about the maximum loan principal they can afford and the repayment amount associated with it.
Know how to estimate your payments with a personal loan calculator
Borrowers can easily estimate their monthly loan payments using a personal loan EMI calculator. They need to enter three key variables: loan amount, interest rate and loan tenor on the displayed fields.
Here are the steps to estimate EMI payments using a personal loan EMI calculator:
Step 1: Go to preferred lender’s official website and select personal loan EMI calculator from the list of financial tools.
Step 2: Use sliders or type the loan amount, interest rate and loan tenor in the given fields.
On entering the amount, the EMI amount will be reflected on the screen. Borrowers can recalculate EMIs by changing the sliders.
The mathematical formula based on which a personal loan calculator works is-
EMI Amount = [P x R x (1+R)^N]/[(1+R)^N-1]
Here P denotes loan principal amount
R represents interest rate levied by lenders
N suggests repayment tenor.
The EMI amount will vary on changing these variables, helping one choose the best loan option and plan the personal loan EMI repayment better.
Benefits of using a personal loan EMI calculator
A personal loan EMI calculator bestows borrowers with the following benefits:
- Avail the best loan: One of the notable benefits of using a personal loan EMI calculator is that it helps borrowers compare different loan options available in the market. Borrowers can enter different loan amounts and interest rates and get a holistic idea about total cost of borrowing, helping them choose the loan option that best suits their repayment capacities.
- Ensure healthy credit score: As borrowers have a well-rounded idea regarding the EMI amount, they map out a repayment schedule that will help them repay the loan within the fixed date, helping boost the credit score. Besides repaying the loan amount, borrowers should consider other ways to improve personal credit score.
- Select preferred loan tenor: As borrowers can change the sliders to choose the best loan option, they can easily find the right personal loan tenor per their repayment capabilities and other financial obligations.
- Saves time and provides accuracy: With a personal loan EMI calculator, borrowers can get an idea regarding the monthly payments in a split second, thereby saving turnaround time. Manual calculations are hectic and prone to errors. With the help of a personal loan EMI calculator, one can get an accurate result.
- Easy to access: One can easily access a personal loan calculator online. They need to enter loan amount, interest rate and loan tenor to reflect the EMI amount immediately. Moreover, they can use it for free as often as needed to compute the EMI amount.
Apart from computing the EMI payment beforehand, borrowers must look for a lender offering the lowest personal loan interest rate to make the borrowing affordable.
After computing the EMI amount in advance, borrowers can conveniently go ahead with the online personal loan application process.
Know how to apply for a personal loan
Here are the steps that will guide borrowers toward a hassle-free personal loan application:
Step 1: Go to preferred lender’s official website and head to the product page to select a personal loan.
Step 2: Now click on ‘Apply Now’ and get redirected to the online application form.
Step 3: Fill it with necessary details and attach relevant documents.
Step 4: Enter desired loan amount and await approval.
Once the lender verifies the loan documents, the sanctioned loan amount will be disbursed to the borrower’s account.
Besides planning the repayment schedule, borrowers should also check out exclusive pre-approved offers extended by leading financial institutions like Bajaj Finserv. These offers are available on several financial products like personal loans, business loans, credit cards, etc., that help borrowers with an expedited lending process. Intending individuals can check their pre-approved offers by submitting their names and contact details.
To sum up, a personal loan can only prove functional and hassle-free if borrowers plan the repayment schedule in advance with the help of a personal loan calculator. It is a generic computational tool that helps borrowers gauge their repayment capacities and prevents them from falling into a debt trap.