Planning for a loan is essential and must be done diligently before applying. Before sending in your application for a Personal Loan, make sure you budget for everything to ascertain the most suitable loan terms for yourself. The aim is to ensure the loan terms align with your financial capabilities.
Usually, borrowers find a seemingly good interest rate and immediately jump on the bandwagon of the loan provider offering it. Well, this is not the right move. You need to calculate the EMIs that will come out of your pockets and find a tenure that suits your finances.
The most efficient way to plan a loan is with a Personal Loan EMI calculator. This digital calculator is free to use; and you can access it easily on the websites of leading banks like ICICI Bank, accessible via smartphone or any browser. This article provides a complete guide to calculating the monthly instalment amount required to repay a loan using an EMI calculator.
What is a Personal Loan EMI Tool?
No time-consuming manual calculations are needed with an EMI calculator, and calculations only take seconds. To use the tool, you need to enter the values for the Personal Loan interest rate, tenure, and amount, and the EMI calculator will automatically show the results.
When to Use the EMI Interest Calculator?
For Personal Loan planning, this tool comes in handy, as you will have to assess the results for several combinations of loan terms. An EMI calculator makes the process time-efficient; you can use it anywhere.
A Personal Loan EMI calculator makes it fairly easy for borrowers to compare different offers based on their terms. And a major advantage for borrowers is that it highlights the best loans for them available in the market.
By assessing loans based on your affordability, shortlist options that truly match your profile.
Essentials of EMI Interest Calculator
An EMI (Equated Monthly Installment) calculator is a tool that helps borrowers calculate the amount they need to pay each month towards their loan repayment. The tool typically requires the following inputs:
- Loan amount – It is the amount you need to borrow from the bank. Ensure the amount you need comes under the banks’ loan amount range
- Interest rate – EMI interest calculator gets you the total payable interest result. And the same is based on the rate of interest you have chosen for your Personal Loan. You need to make sure that the rate you choose for the loan is the one you are comfortable paying
- Loan tenure (in months) – Loan tenure for a Personal Loan usually ranges from 12 to 60 months. But there are some lenders that might offer you an extended tenure. So why choose a shorter term when you can get a lower EMI for a longer term
Based on these inputs, the Personal Loan EMI interest calculator generates the following outputs:
- Monthly instalment amount
- Total interest payable
- Total repayment amount
As long as you enter the right values, you will get error-free results. And this eliminates the probability of errors. So you never have to worry about inaccurate estimates when planning for a loan with an EMI calculator.
This is an important benefit of an EMI calculator because loan planning based on inaccurate estimates can lead to misappropriation of funds. This can further lead to you defaulting on repayment or missing an EMI payment, which can negatively affect your financial standing.
EMI calculators are widely used by individuals looking to take a loan, as they help them understand this financial commitment. The tool also compares different loan options, as different lenders may offer different interest rates and loan tenures.
Personal Loans don’t just involve taking the loan but repaying it after clearly planning the budget accordingly. As mentioned above, a Personal Loan EMI calculator gives you an estimate for any and all combinations you enter. And this information makes it easier for you to do your research.
This is how you can make an informed decision on your Personal Loan. The advantage of using the calculator is that you always get accurate results. Manual calculations of EMI amounts can lead to errors, but you don’t have to worry about such issues with an EMI interest calculator.