A personal loan EMI calculator is an easy to use tool that helps you accurately calculate the EMIs to be paid on a personal loan.
With interest rates on personal loans tightening following RBI’s hike in repo rates, calculating monthly EMIs is a challenge for borrowers. While the calculation can be done manually by using this formula “EMI= [P x R x (1+R)^N]/[(1+R)^N-1]”, where P is the principal loan amount, R is the rate of interest and N is the number of installment, an easier way to do this is by using an online personal loan EMI calculator. Read on to know how to use this calculator and the benefit it offers.
What is a personal loan EMI calculator?
An EMI loan calculator is a tool that calculates the EMIs you need to pay on the personal loan taken. It’s a simple calculator where you need to enter three things to know the EMI amount:
The loan amount
Rate of interest
Based on the inputs, the Personal Loan EMI Calculator instantly calculates the EMI amount. Modern calculators not only reflect the final EMI amount but also the total interest payable and the total payment, including the principal and the interest, to be made.
For instance, if you avail a personal loan of Rs.1 lakh for a tenor of 24 months at an assumed interest rate of 12%, your monthly EMIs would come to Rs.4,707. The total interest outgo on the loan would be Rs.12,970 and the total payment (principal + interest) you need to make on your loan would be Rs.1,12,970.
Benefits of a personal loan EMI calculator
Easy to use
The loan calculator is extremely easy to use. All you need to do is to put the relevant figures in the sections given to know the EMIs to be paid, thus making EMI calculation a breeze.
When you calculate manually, there are chances of an error. However, the loan calculator, completely eliminates any chances of an error, thereby giving you an accurate figure.
Helps in comparison and chalking out finances
Interest rates on personal loan vary across lenders, which has a direct impact on the EMI amount. A
high-interest rate increases the EMIs and vice-versa. A personal loan EMI calculator helps you determine the EMIs to be paid based on varied interest rates from multiple lenders. Thus, it helps you chalk out your finances accordingly.
Can be used anytime
Nowadays, with the rise in the use of smartphones, various financial institutions have come up with personal loan EMI calculator apps which allow you to instantly calculate the EMI amount. These apps are quite handy and can be used offline, too. In case you don’t have an internet connection and need to know the EMIs to be paid on a personal loan, you can use one of these apps.
Personal loan interest rates depend on several factors including your credit score, income, age and monetary policies of the government. Availing a loan at a competitive rate helps you keep your EMIs within budget without choking cash flow.