Unlike a home loan or education loan where the loan amount can only be used for specific purposes, a personal loan offers much more flexibility. Personal loan borrowers can use the loan amount to cover numerous expenses without any restrictions from lenders. This is the reason why most borrowers prefer personal loans when they are in need of financial assistance. For instance, a personal loan can be used to cover medical bills, home renovation expenses, academic fees, or even clear off any dues.
Now, while a personal loan can be helpful to someone in need of funds, it is also very important to make sure that the loan can be repaid. The only way to make sure of this is to be aware of the loan’s Equated Monthly Instalments (EMIs) beforehand. One effective way to do so is to make use of a personal loan EMI calculator. This calculator is an online tool that displays a personal loan’s EMI payments.
To display the EMI results of a loan, a personal loan EMI calculator needs information in the three following fields:
- Loan amount
This refers to the amount that the borrower will apply for. A lot of financial institutions offer personal loan plans that range from Rs 50,000 right up to Rs 25 lakh. While there are many lenders that can offer such high amounts, do note that it is advisable to only apply for an amount that is required. Applying for an excessive amount can result in the loan being unnecessarily expensive. Apply for personal loan only after carefully evaluating the expenses at hand and the exact loan amount needed to cover them.
- Repayment tenure
This tenure is the period in which a borrower has to pay off the personal loan they have taken in monthly instalments along with the interest levied by the lender. While some might prefer going for a long repayment period to ensure that the EMI payments are easier, some would choose a short tenure to cut down the total interest payments towards the loan. Now, it is essential to pick a repayment tenure that is suitable as per one’s budget in order to avoid any financial troubles while clearing off the personal loan EMI payments.
- Interest rate
Any financial institution that offers personal loans is going to charge certain interest rates on these loans. The interest rates offered on personal loans can differ from lender to lender based on each one’s terms and conditions. Now, a personal loan interest rate impacts the loan’s monthly instalments, which is why it is essential to choose a lender that offers competitive personal loan interest rates.
Once a personal loan EMI calculator has the details of the above-mentioned fields, it will immediately display the loan’s EMI payments. Users can make changes to all three fields until they arrive at an EMI value that suits them. This tool can be used for free at any time and is available on most lenders’ websites.