A personal loan is a multi-purpose loan with which you can borrow to meet all kinds of financial requirements. The loan funds can be used for house renovation expenses, car repairs or financing a holiday for your family. A personal loan would be a reliable instrument to get instant funds. As personal is an unsecured loan, the interest rate charged on loan is generally higher than other loans like a home loan or a car loan. Hence, you need to know your financial requirement and repayment capability for a smooth loan process. A personal loan calculator can help to calculate the loan EMIs assigned for repayment of your loan. Let’s have a look at some of the features that an EMI calculator has to offer:
- Helps in Comparing Lender
When you plan on getting a personal loan, you do your research and look at all the options available in the financial market. With the help of a personal loan EMI calculator, you can be able to see the difference in the rate of interest offered by different lenders and show you the EMI outflow to choose an affordable option conveniently.
- Saves you from making errors in EMI Calculations
There are different ways to calculate EMIs one is a manual calculation, and the other is using Microsoft Excel. However, both methods of analysis are tricky, and there are chances of making errors. The personal loan EMI calculator has a simple process; you need to fill in the required details such as the Loan amount required, loan tenure, the rate of interest. The EMI calculator will get the value for you in a matter of seconds, with the exact and accurate calculations in the best manner.
- Overall Cost of Loan
With a personal loan EMI calculator, you can calculate the total interest charged on your monthly instalments and the total payable amount. These three costs can help you determine whether the loan is suitable and affordable as per your requirements. You can also reconsider the loan amount that you need, which may lead to more feasible financial decisions.
- Plan Loan Repayments
Change the values of the loan amount or tenor and keep the interest rate constant to get a suitable EMI. When you calculate your EMIs with the personal loan EMI calculator, you also get to see the amortization table. This is a detailed breakup of the principal and interest components in each EMI; this will help you to plan and manage your loan repayments better. These are among the several reasons to use an EMI calculator.
Personal Loan Amortization Schedule
A personal loan amortization schedule is a complete table of periodic personal loan payments. This table displays the Principal Amount and the Interest amount that needs to be repaid to close the loan on the set loan tenure. The period to pay off the entire loan amount as well as the amount to be paid over the period is predetermined and mentioned in the terms and conditions of the loan. Each EMI consists of principal as well as interest components. Even though the EMI payment remains fixed, the principal and interest change in every payment. Making repayments of the loan over the scheduled period with EMIs at regular intervals is known as ‘Amortization’.
Formula to determine EMI loan amount
There is a specific formula used to compute the EMI amount for a loan.
EMI (Equated Monthly Installments) = [P x R x (1+R) ^N]/ [(1+R) ^ (N-1)]
The P stands for the principal amount
R stands for the interest rate
N stands for the loan tenure
The above formula is the standardized formula used by an online loan EMI calculator.
Once you decide the loan amount you need as per your requirement and affordability, go for a lender which offers you the best features based on your needs. Nowadays, lenders have their personal loan app for customers to get a loan online. By applying for a Bajaj Finserv Personal Loan with the Finserv MARKETS app, you get quick disbursal on funds anywhere between Rs. 25 Lakhs to Rs. 40 Lakhs at attractive interest rates and flexible tenures of 1 to 5 years on loan. They also provide you with an EMI calculator that gives you the exact monthly outflow of your EMI amount, this makes your loan repayment much easier.