Here’s Why You Need to Use a Personal Loan EMI Calculator

Even with a job, decent amount of savings and investments, in certain instances a person may still need additional funds of a large value. This can be because of a medical emergency, plans for a vacation, home repairs or renovation, for wedding expenses and so on.

In the case of expenses of this nature, a personal loan can be quite helpful. Certain non-banking financial institutes even provide personal loans of up to INR 25 lakhs with an approval process for around 5 minutes and a 72-hours period in which money is transferred to the bank

Moreover, some NBFCs even give pre-approved personal loan offers to their existing customers, and these can come with some attractive loan terms.

In terms of eligibility as well, the criteria for a salaried and self-employed person isn’t too difficult to fulfil. By having your documents in place, the whole process will become less time-consuming.

Also, a personal loan can be beneficial in many ways. When you go to the right bank or NBFC, you can get various perks. Some financial institutes for instance also have a flexi loan facility with a personal loan. Herein, you can pre-pay or withdraw money within a certain credit limit, and interest is payable only on the utilised amount.

Thus, it can be fairly simple to secure a personal loan. However, an important point worth considering is the financial impact of taking a personal loan. Because depending on the interest rate and the loan tenor, you can end up paying a significant amount every month as an EMI. This process can be made simpler with the help of an EMI calculator.

Personal Loan EMI calculator:

This is why it can be essential that you take the time to compare and understand the loan terms being offered by different lenders. Moreover, it can be easier for you to understand the financial implications of taking the personal loan with the help of a personal loan EMI calculator.

An EMI calculator is a mathematical formula that helps calculate the amount you will have to pay every month on the loan amount. This calculator is available on the sites of different banks and NBFCs.

How it works:

Three factors are considered by the EMI calculator. These being: The loan tenor, loan amount and personal loan interest rate. These factors are entered into the formula:

E=

P x r x

(1+r)n

(1+r)n-1

Herein E stands for the EMI, P is the principal amount of the loan, r is the interest rate and n the loan tenor.

Thus by knowing these 3 values, you can easily find out the EMI for your personal loan. Note that some sites even offer a user-friendly software where you only have to scroll through different values for each parameter and instantly see the resulting EMI.

A personal loan can be helpful in many ways in terms of proving funds for a really wide variety of needs. But by having a proper financial plan and using tools such as a personal loan EMI calculator, you can be certain about comfortably paying the EMIs as well.

Arwind Sharma is a financial advisor with an experience of more than 7 years. He has worked for topmost financial firms in India and has been a visiting faculty at many reputed institutes in India.