A personal loan is one of the most preferred financial tools to secure instant money. Availing a quick loan to fulfil varied financial needs has become quite popular these days. Earlier, people perceived loans as a negative debt instrument with complex processing and high interest rates, but with money loan apps changing the financing landscape; personal loans are often seen as an effective and affordable financing avenue for emergency needs. You can easily download a money loan app on your mobile and apply for an instant loan in minutes. But before you apply for a personal loan you must know about the online personal loan calculator that can provide you accurate data within minutes.
This calculator will help you understand your loan eligibility amount, the interest rate you are eligible for, and the total interest pay out that you would be making towards this loan. Read on to understand this in details.
What is a personal loan calculator?
A personal loan calculator is a very useful tool that can help you figure out how much interest you’ll have to pay for a specific loan account. This tool helps you determine how much of a loan you can accept and how much money you can set aside each month for loan repayments. An EMI calculator for personal loans uses the required loan amount, the offered interest rate, and the requested loan term for making the calculations. Thus, you can see different permutation and combinations by altering the capital loan amount and the loan tenure you would want.
How Can an Online Personal Loan Calculator Provide Accurate Data in Minutes?
An online personal loan calculator is an online tool that uses variables like interest rates, loan term, and amount to calculate your EMI. All these calculations are done automatically using technology. You just have to input your required loan amount and the loan tenure that would best suit your affordability and capability to pay the EMI.
The Personal Loan EMI Calculator is easy to use and only requires three steps.
To begin using the EMI calculator, there are only three things you need to know:
- The sum borrowed
- The term of the loan or tenure
- The amount of interest charged
Take this as an example. Consider that you want to find out what your EMI will be if you take out a personal loan for Rs. 3 lakhs with a 2-year term and a 10% annual interest rate. The following tasks will only take a few seconds once you follow this procedure:
To select 3 lakhs, drag the slider in the Loan Amount box.
Then, set the slider in the Rate of Interest section to 10.
Finally, in the Loan Tenure section, drag the slider to 2.
After filling in this information you will see your EMI amount on your screen.
If you don’t believe in automated technology then you can also perform this calculation manually to determine the EMI for your loan using the following formula:
P × R × [(1+R) N / (1+R) N-1]
EMI = P * R * (1+R)n
E is the EMI, where
The principal Loan Amount is P.
The interest rate is R.
N represents the loan term in months.
This will take much longer and sometimes manual calculations are prone to human errors. So a personal loan online calculator is the best way to calculate your loan EMI.
What Are the Benefits of a Personal Loan Calculator?
Here are some of the benefits of using a personal loan calculator –
- It is simple to use: a personal loan calculator is very easy to use. All you have to do is enter the loan amount, tenure and interest rate and you are good to go. In just three simple steps, you can get the results that will help you make a smart decision for your loan.
- Results are reliable and accurate: A personal loan calculator is a smart tool that can generate reliable and accurate results within seconds. As the results are generated using the latest technology there is zero room for error and you can try different combinations multiple times to decide which combination works best for you.
- Enables Quick Comparison of Loans From Several Lenders: Different lenders have different interest rates; you may enter the loan amount, tenure, and interest rates given by different lenders and then compare them to find which one has the lowest EMI and is most reasonable.
- Saves Time: Earlier you had to visit the lender’s branch to get information on the loan EMI amount but now you can get this information instantly on a personal loan EMI calculator.
- Makes Loan Planning Easier: When you use an online personal loan calculator you get the idea about your monthly EMI amount and the total interest pay out. This will also help you create a sound repayment plan which is very important. It might be challenging to pay for a loan each month without preparation and strategy.
- Eliminates Need for Manual Calculations: Completing the calculations by hand may be tiresome and time-consuming in addition to being prone to mistakes. Doing repetitious arithmetic computations is complex. All of your calculations will be handled promptly by our EMI Calculator for Personal Loans.
- It’s Free of Cost: There is no charge for using the tool as many times as you like. Additionally, you may use the EMI Calculator for Personal Loans whenever you choose, from wherever you are.
Many borrowers choose quick loans like personal loans because they do not require collateral. They are useful in times of urgency and are quick to process. Thus, you can get the loan amount in your account within hours. But before you go ahead and sign up for a financial commitment, make sure to understand the implications of having a loan, the impact your monthly EMI will have on your budget, and your affordability of the loan. You can use an online loan calculator to make the necessary calculations and arrive at a smart financial decision.