Life is uncertain and we can’t always plan for contingencies. Building an emergency fund is crucial, but sometimes it’s easier said than done. Whether it’s a medical emergency, renovating your house, a wedding in the family or even consolidating Credit Card debt, a Personal Loan could be the answer to it all.
Additional Reading: A Personal Loan Could Be Your Very Own Superhero
Personal Loans are easy to get. They need no collateral and can be acquired instantly through paperless approvals. So, why bother borrowing money from friends and relatives or liquidating your assets when you can get a loan in such a short span of time?
A Personal Loan is ideal for both salaried and self-employed people and can be of great help during a cash crunch. But, before you jump off your seat to apply for one, you might want to know all about the nitty-gritties of Personal Loans.
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For instance, you might want to figure out what your EMIs are likely to look like. And this is where the Personal Loan EMI calculator comes into the picture.
A Personal Loan EMI calculator is an online tool which helps you calculate your monthly EMIs easily. We’re going to help you understand how an online Personal Loan EMI calculator works and demonstrate how easy it is to calculate your monthly EMIs using one.
All you need to do is key in some information about your loan and sit back and relax. The tool will do the rest. Here’s what you need to key into the tool.
Loan Amount
When you’ve decided on the amount you would like to borrow, enter it in the online EMI calculator.
Keep in mind that the amount sanctioned by the bank will depend on your income and repayment capacity. So, you may not always get the amount that you’re looking for.
Unlike a Home Loan or a Car Loan, banks will lend you the full Personal Loan amount you request. But, this depends on factors like your Credit Score, your monthly income and your eligibility.
You can check your eligibility for a Personal Loan right here.
Tenure of Personal Loan
Once you have decided on the loan amount, you need to choose the loan tenure or the period over which you intend to pay back the loan. Generally, the repayment tenure for a Personal Loan ranges from 12 months to 60 months. However, this may vary from one bank to another.
Depending upon your income, your financial stability, and your discipline to repay the loan, you must choose your tenure. Getting a longer tenure with a smaller EMI amount will work for you in case you have other financial responsibilities or other loans. But, if this is going to be your only loan, you can choose a shorter tenure.
The tenure of your loan is very important since that is your ‘commitment period’ given to the bank to repay the borrowed money. Choose your tenure carefully.
Additional Reading: Longer Tenure Or Higher EMI For Personal Loans?!
Interest Rate and Processing Fee
Once you have entered the loan amount and tenure of the loan into the calculator, the next thing you need to do is enter the interest rate offered by your preferred bank. Generally, the rate of interest for Personal Loans ranges between 14% and 20%. However, this also can vary from bank to bank.
Specific interest rates are applicable for different customers, depending on their employer category, location and salary slab. The processing fee can also vary from one bank to another, but most banks generally have a 0.5% to 2% processing fee on Personal Loans.
Additional Reading: What Are The Charges And Fees On Personal Loans?
Amortisation Details
The online Personal Loan EMI calculator also has an option of displaying amortisation details. Amortisation details help you understand your principal Personal Loan amount, interest paid till date and the details of your outstanding loan amount on a half-yearly or annual basis.
It’s that simple. The Personal Loan EMI calculator is a great tool which helps you calculate your monthly instalments on your Personal Loan. Once you enter all the details mentioned above into the online Personal Loan EMI calculator, just hit ‘calculate’ and voila, you have your EMI amount! Easy peasy!
Now that you know how this calculator works, you can go ahead and check out the other loans we have to offer.