Currently, customers are availing of different credit facilities to fulfilll varied financial requirements. A survey shows that around 67% of the country’s population prefers advances, displaying a massive shift in customer behavior compared to the past few years.
- About 33% of consumers are willing to avail of personal advances to meet high-end purchases and expenses.
Nevertheless, to ensure hassle-free repayment, one needs to borrow per their repayment capacity. A personal loan interest calculator can aid in this matter, allowing borrowers to apply for a suitable loan amount.
EMI Calculation Using a Personal Loan Interest Calculator
Financial institutions have introduced online tools like the personal loan interest calculator, allowing borrowers to determine their financial outgo and plan repayments effectively.
These online financial instruments are convenient and intuitive platforms that display a breakdown of credit repayment expenses. With this calculator, borrowers can calculate personal loan EMIs and get an entire debt breakdown by entering determinants such as loan amount, interest rate, and tenor.
Calculating EMIs manually can be tedious, and incorrect results can disrupt repayment strategies. The formula for calculating personal loan EMIs is:
EMI= [Px R x (1+R) ^N] / [(1+R) ^N-1]
Here, P refers to the principal sum, R denotes interest rate, and N represents repayment tenor. Therefore, it is suggested to rely on this personal loan interest calculator to obtain error-free results.
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Steps to Using a Personal Loan Interest Calculator
Step 1: To use this calculator, individuals need to visit their preferred lender’s website and search for an interest calculator.
Step 2: Now, customers can choose their preferred loan quote by inputting their loan amount, tenor, and applicable interest rate. You can choose to alter the figures till you receive a suitable result.
Step 3: After inputting these determinants, you need to click on the “Calculate” option to view the results.
With the facilities of zero end-use restriction, no collateral, and a substantial amount, the personal loan is always a sought-after financing option. However, since it enables borrowers to obtain a considerable amount without pledging any asset, it often leads customers into a debt trap.
Therefore, even if customers acquire emergency loans to fulfil necessary financial requirements, they must not forget to use interest or EMI calculators to better plan repayment strategies.
Benefits of using a Personal loan interest calculator
Helps in comparing interest rates
Usually, the personal loan rate of interest differs across lenders, based on the credit profile of a borrower. For example, an individual with a credit score of around 800 is eligible to avail an attractive interest rate than an individual with a score of 500. Therefore, borrowers need to know the ideal CIBIL score before applying for the credit and improve it if required by adopting necessary strategies from time to time.
Apart from this, borrowers must know the factors affecting their personal loan interest rate and maintain them as per the requirement to negotiate personal loan ROI and servicing terms with lenders.
Helps assess loan amortization
One portion of the payment goes towards clearing dues when one repays a loan through instalments, while the remaining is the interest component. With each EMI payment, the proportions of the interest and principal change. However, the EMI amount remains constant unless there are any changes in the financial market.
As a borrower, one must learn the breakdown of expenses to help them make effective financial decisions in the long run.
Helps in choosing a suitable repayment tenor
While opting for personal advances, one must choose a suitable repayment tenor, including the principal amount. However, financial institutions often extend much flexibility when choosing a repayment period for a personal loan.
Customers can use this rate of interest calculator multiple times, alter the values and settle for a tenor per affordability.
Therefore, prospective borrowers can determine affordable EMIs by altering the loan amount and tenor using a personal loan calculator.
However, customers must note that one must carefully choose the tenor before obtaining a quick personal loan. Selecting a longer tenor can reduce EMIs but increase the interest outgo and vice versa.
Displays accurate results
These calculators are available on leading financial lenders’ websites, such as Bajaj Finserv. Such reputed lenders also extend exclusive pre-approved loan offers on a comprehensive range of financing options, such as personal loans, business loans, credit cards, etc. With the availability of these offers, one can dodge the hassle of extensive documentation and save time. Customers can check their pre-approved offers by mentioning their names and contact information.
To conclude, one can evaluate EMIs or apply for a suitable quote by using a personal loan interest calculator in a few steps. Furthermore, with the help of this online tool, one can choose to part-pay or foreclose the loan before the tenor ends.