Personal loans are a popular way to cover a wide range of expenses, from home renovations to medical bills to credit card repayments. However, one must be careful when taking a personal loan, as too much debt can quickly spiral into a debt trap. That’s where a personal loan EMI calculator comes in handy. Not only does it help one understand exactly how much they owe every month, but they also help choose the right lender.
Here’s a list of the key benefits of using a personal loan EMI calculator when managing your finances.
Benefits of Using a Personal Loan EMI Calculator
Taking a personal loan is a significant financial decision. It is, therefore, advisable to use a personal loan EMI calculator to get a clear idea of the required EMI payout, which, in turn, allows one to plan their finances accordingly. Let’s look at some benefits of using a Personal Loan EMI calculator.
It helps with the accurate calculation of EMIs.
When you take a loan, knowing the exact amount you will have to pay every month is crucial. An EMI calculator gives you the accurate EMI you would be required to pay for the entire loan tenure. Many online EMI calculators also give a month-on-month or year-on-year amortisation table. The table will help you understand the month-wise and year-wise loan breakup of principal paid and interest paid.
It makes calculation quick and convenient
Calculating loan details is no longer a tedious task with the introduction of online personal loan EMI calculators. The good thing is personal EMI loan calculators are easy to use and require minimal details to generate accurate results. So now you can bid adieu to complicated calculations and guesswork when it comes to your loan instalments. With an EMI calculator, you can easily get all the necessary details about your loan repayment spread, making informed financial decisions. Moreover, the ability to access these calculators anytime and anywhere adds to their convenience, making them a go-to tool for borrowers. All in all, if you want personal loan immediately, an EMI calculator is indispensable.
It helps one choose the right lender.
Choosing the right lender and interest rates can be challenging as a sea of lenders is available in the market. A personal loan EMI calculator can help you compare and evaluate the loans offered and the interest charged by different lenders. It, in turn, will allow you to choose the most attractive interest rates and suitable loan tenure.
It makes budgeting easier.
Knowing how much you need to pay in monthly EMIs will allow you to plan your budget accordingly. By including your loan repayment as a regular monthly expense, you can better understand how it affects your overall budget. It helps you prepare a suitable budget around the EMI and ensures your monthly savings do not take an unexpected hit.
Factors that Affect a Personal Loan EMI
Here are the three main things that help determine a personal loan.
- Principal Amount – The first thing that determines a personal loan EMI is the principal amount. It is the amount a lender lends as a loan to the borrower. It has a direct impact on the EMI. It means the higher the principal amount, the higher the EMI that the borrower has to pay.
- Rate of interest – It is the rate at which a lender lends to the borrower. And just like the principal amount, the rate of interest is also directly proportional to the amount the borrower pays as EMI against their loan.
- Tenure Period – The tenure or period is when the borrower has to repay the loan to the lender. Unlike the principal amount and rate of interest, the tenure is inversely proportional to the EMI. For instance, if you take a loan for a longer period, you will have to pay smaller EMIs. However, if you choose a shorter repayment period, you will have to pay bigger EMIs
Note: There are many online calculators available on the internet. Choose one that gives you the loan repayment breakup in the form of an amortisation table.
Conclusion
A personal loan is a practical solution to cover various types of expenses. With an EMI calculator, you can better plan and manage your finances, save for your goals, and choose the right lender and interest rates. Depending on your income and other criteria, you can borrow a personal loan of up to Rs. 25 lakhs and repay it within 12 to 72 months.
This blog about the uses of a Personal Loan EMI Calculator is a fantastic resource for anyone looking to make informed financial decisions. It serves as a must-read guide for anyone considering a personal loan and wanting to manage their finances more effectively. Great job!