Personal Loan EMI Calculator is an online tool that you can find on the lenders’ websites. With this calculator, the borrower can see his/her possible EMI. And if he/she already knows the EMI before getting the loan, it will be easier for the borrower to plan repayment. With repayment planning, you can avoid late EMIs, penalty charges, etc. In this article, you’ll learn about the Personal Loan EMI Calculator functions, benefits and formula. So, keep reading this page.
What are the Functions of a Personal Loan EMI Calculator?
The tool generates the online EMI, interest and total repayment by getting the details of your loan. There is no time consumption of yours as the tool will generate the EMI within seconds. Ensure you use the calculator on the official website of the lender only. Because the details of a personal loan may vary from lender to lender.
Based on What Formula Does the EMI Calculator Generate Your Result?
A Personal Loan EMI Calculator works on the formula –
EMI = P × R × ( 1 + R ) N /( ( 1 + R ) N – 1 )
If you see the formula, you’ll notice capital letters symbolizing your loan details like –
- P – Principal amount that you’re going to borrow from the bank or NBFC
- R – Interest rate applicable to your loan amount
- N – Tenure over which you need to repay the loan + interest
From the formula, it is easy to understand that. You just need to provide the above information to get the EMIs.
Repayment Planning with Personal Loan EMI Calculator
Using the Personal Loan EMI tool you can do the following –
- Choose Loan Amount – You can borrow an amount that meets your financial needs and can be repaid easily. Using the calculator, you can see whether borrowing an amount above the requirement will make a difference to your repayment or not. If there’s not a huge difference in the repayment, apply for a higher amount so there will be back up money in case the situation demands more money.
- Choose Right Tenure – Find which tenure helps you get the lowest EMI and interest payout. You should know that the longer the tenure, the lower the EMI amount will be. On the other hand, the longer the tenure, the more the interest payout. So, with the help of a Personal Loan EMI Calculator, find a suitable tenure for your loan and see what will be the perfect period for affordable EMI and less interest payout.
- Time to Choose Repayment Method – There are varied options available for loan repayment. Nowadays, the most popular one is ECS (Electronic Clearing Service) which allows you to repay the EMI with an auto-debit facility. It means the money will get deducted from your account on the scheduled due date of EMI. You just need to assure that the account balance is maintained during the loan tenure.
Illustration of Personal Loan EMI Calculator for Repayment
Pranita is a 32-year-old employee in a firm. She’s been looking to borrow a lump sum amount for her sister’s wedding. And she got a loan offer of INR 5 Lakh from a bank. Well, the bank’s interest rate on personal loans starts from 13.00% per annum. This is a reasonable rate, so she uses the personal loan EMI calculator to see what her repayment will be if she borrows the loan.
According to the calculations of the EMI calculator, Pranita’s EMI will be INR 11,377 for the lowest personal loan interest rate. Her total repayment would be INR 1,82,592. As you can see the interest payout is nearly INR 2 Lakh due to the 60-month tenure she uses to calculate the EMI. It is the maximum tenure of the lender. If she uses a tenure of 36 or 48 months, her interest payout will be INR 1,06,491 or INR 1,43,860, respectively.