We all want to buy everything we want to, but reality often makes us realise otherwise. Not anymore. The finance sector gives loans with EMI options for your needs and wants.
EMI stands for Equated Monthly Instalment. It’s simple. You get a sum of money from the borrower. Pay it every month as a part of loan repayment. In this way, you can easily plan your monthly expenses and flexibly repay them. To understand the numbers at play, checking the personal loan EMI calculator online is better than doing tedious calculations yourself.
In this article, we will discuss calculating the EMI of personal loans and checking the eligibility criteria in detail.
What is a Personal loan?
This loan is an unsecured loan provided by lenders, credit unions and online lenders, the amount varying from thousands to lakhs. Getting personal loans is simple and easy without the collateral pledge.
Personal Loan EMI
The personal loan EMI is calculated by the reducing balance method. First, the interest is calculated according to the unpaid loan amount at the start of the month, after which the principal amount repayment is deducted from the outstanding balance.
Personal Loan EMI Calculator
The personal loan EMI calculator is an online calculator. It helps you to calculate the monthly instalments of the loan amount. The instalment covers both the principal amount and interest charged. The period usually ranges from 12 to 60 months.
The benefit is that you can get your repayment amount details for various loan amounts in seconds.
- Planning of Finances: It helps plan finances by giving you the correct EMI payments. This allows you to budget your spending accordingly.
- Time Saver: Calculating EMI is a tough task and time-consuming activity. By using an online EMI calculator, the accurate EMI value is revealed with less time and no effort.
- Comparison of Loans: EMI calculator also allows you to compare various loan options. It is up to you to choose the best loan option which fits your financial needs.
Calculation of Personal Loan EMI
Calculating the EMI is a preliminary plan before getting the loan. The master formula involved is EMI=[P×R×(1+R)^N}/{1+R)^N-1]
P=Loan Amount (Borrowed money amount)
R=Interest rate per month (Interest on your loan)
N=Loan tenure in months (Period from borrowing to the last EMI payment)
For example, if you wish to borrow Rs. 4,00,000 for two years with an interest rate of 10.49% per annum. The principal rate repaid during the month will be 3,763. The closing balance will be 96,237.
The process is hectic to calculate manually. It is better to opt for an online calculator.
Let’s look at the step-by-step process to calculate your EMI:
- Go to a reputable Loan EMI calculator website online.
- Type in the loan amount you want to borrow.
- Enter the loan tenure in months.
- Enter any additional details like processing fees and prepayment charges.
- Click on the calculate button.
- It generates a table showing the EMI amount, total interest and other information.
- Now, you can try entering different loan amounts, interest, and tenure and recalculate EMI. It gives a clear picture of your EMI.
Points to note: EMI amount calculations may vary slightly from your lender.
Eligibility Criteria for a Personal Loan:
Let’s check the eligibility of the personal loan. But first, check for a website that has this feature available.
- Locate the Eligibility Calculator: Check for the personal loan eligibility checker. Most websites will have a separate page for this.
- Provide Your Personal and Financial Details: Your basic information such as age, income, working status and credit score.
- Submit Your Information: Submit the form and whether you are eligible. Eligibility criteria will be displayed.
- Apply for a Loan: If you meet the criteria, apply. It is always better to crosscheck with the lender at the final stage.
Points to Note: The eligibility check is a rough prediction. The approval of the true loan amount depends on your credit score, income and other factors.
Conclusion
A personal loan is crucial for meeting your financial needs in an emergency. Paying the loan in EMI gives you financial freedom and flexibility to pay anytime. In addition, you can easily calculate your personal EMI and eligibility online using financial websites.
This EMI calculator helps you to borrow a decent amount, plan your finances, and save time and energy. You can compare your loan offers and final EMI payments. The eligibility checker emphasises the criteria for the loan and develops a good understanding of the whole process.
