How do Personal Loan EMI Calculators Work?

A Personal Loan is the easiest and fastest way to get instant money that helps meet emergency financial needs. From home renovations to wedding expenses to medical bill payments to buying your favourite gadget – you can apply for an instant loan without leaving your home.

Using a Personal Loan Calculator Online

Once the loan amount gets disbursed to the borrower’s account, the borrower might feel like the hard part is over. But the truth is getting a loan is the easy part of the journey. The more significant challenge is the loan repayment in instalments every month until the end of the loan tenure. Using a Personal Loan calculator can help you calculate, in an instant, how much you will have to repay based on how much you borrow and the repayment tenure. In short, it helps you check your Personal Loan Eligibility before applying. Most NBFCs like Clix Capital provide Personal Loan calculators on their websites for borrowers for free.

Here’s how a Personal Loan calculator works:

  1. Enter the Personal Loan amount you wish to borrow. This amount is called the principal amount.
  2. Enter the rate of interest that your lender is charging on your loan.
  3. Adjust the slider to determine your loan tenure.
  4. Based on the values of your P (principal), N (number of years for repayment) and R (rate of interest), the Personal Loan EMI calculator will tell you the exact loan expense you will incur.

Benefits of a Personal Loan EMI Calculator:

A Personal Loan has several benefits. It helps you meet your financial needs at the moment, deal with emergencies and maintain your standard of living. When you use a Personal Loan calculator, there are additional benefits you can reap.

1. Identifying the most affordable loan and finance management options:

No matter your reason for taking a Personal Loan, the interest rate levied by the lender will make a huge difference. Not only does it affect your loan expense overall, but it also makes up the more significant part of your EMI during the initial days of your tenure. The higher the interest rate, the greater your loan will cost. A Personal Loan calculator is instrumental in deciding your monthly expenditure and helps you foresee how taking a loan will affect your costs in the coming months or years.

2. Providing insight into the principal amount that fits within your budget:

When it comes to instant credit, Personal Loans and credit cards are the leading choices for any person. Credit cards give you access to practically limitless credit. This could lead to debt piling up without you realising it until it’s too late. Late payments and failure to repay credit card bills will also negatively impact your credit score. A Personal Loan, however, caps your credit to the principal amount you borrow. You can plan your repayment process and tenure, keeping your income sources and repayment capabilities in mind. Proper planning also reduces your chances of defaulting on loan EMI repayments, ensuring your credit score remains high, and debt remains low. Using a Personal Loan calculator also helps you account for other monthly expenses, such as utilities and rent. If you plan to take a loan for any reason in the foreseeable future, using a Personal Loan calculator will help you understand your expenses and plan better. That way, your loan repayment tenure will not become stifling for your lifestyle.

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