While taking a Personal Loan today has become easier than ever with quick online application and instant approval, don’t forget to plan for repayment beforehand. Spending a little time organising your finances and ensuring you can afford the EMIs will help you borrow the right amount, make timely repayments and boost your credit score in the process.
Here’s how an online EMI calculator helps you plan your Personal Loan better.
Why is a Personal Loan EMI Calculator necessary and how does it Work?
Approaching a lender for a Personal Loan and applying for one is easy. You only have to submit minimal paperwork and you don’t have to pledge any collateral. But, there’s always the question of whether or not you can afford repaying the Personal Loan. Manually stacking up the numbers against your income and current expenses can be tricky and riddled with errors. In such a situation, an online EMI calculator can come to your aid.
It takes into account the principal, tenor and interest rate to tell you what the EMI will be. Bajaj Finserv not only offers low-interest, high-value Personal Loans with features such as a flexible tenor and Flexi Hybrid facility, it also offers you an online EMI calculator to understand your Personal Loan better.
Here’s a look at everything you need to know about an online EMI calculator.
It is Based on this Formula
The online EMI calculator is based on the same formula that you would use to calculate EMIs manually. This is defined as follows: EMI = [P x R x (1+R)^N]/[(1+R)^N-1]. Here, ‘P’ stands for the principal; ‘R’ stands for the rate of interest per month and ‘N’ for tenor, expressed in months.
Since this calculation is computerised, you can calculate your EMI with the use of Personal Loan EMI calculator gives you results in seconds, and you can rest assured that they are 100% accurate. This is in contrast to calculating the EMI manually, which can be time-consuming and riddled with errors.
It Lets you Experiment with Different Values
All online EMI Personal Loan calculators allow you to vary the values of the principal, interest rate and tenor as many times as you wish to. This feature helps you understand the effect each element has on your total EMI. You can choose a long tenor over a short one to enjoy lower EMIs. On the other hand, if you want to clear the loan quickly, you can check if choosing a short tenor aligns with your budget.
Besides arriving at the ideal tenor that minimises your interest payment, you can also consider tweaking the principal amount. This will help you zero in on an EMI that fits into your budget, while ensuring that the loan meets your needs sufficiently.
Varying the interest rate, on the other hand, allows you to evaluate Personal Loans offered by the many lenders in the market. This way you can see the impact that the interest rate has on the EMI by keeping the principal and tenor constant, and accordingly choose the most affordable loan.
How Personal Loan EMI Calculators Help
In a nutshell, here’s why using an online EMI calculator is beneficial.
● It helps you compare various loans so that you can choose the best one.
● By giving you a look at your EMIs beforehand, it allows you to plan for repayment even before you apply for the loan.
● Once you vary the three elements to arrive at an EMI that works for you, you will have a clear idea of how much you can afford to borrow.
● Depending on whether you want to enjoy low EMI payments or want to clear the loan quickly, it will help you choose the right tenor.
● Since it gives you accurate results in seconds, it is a great alternative to manual calculations.
So, from deciding how much to borrow to choosing the right tenor for repayment and organising your finances to make timely EMI payments, an online EMI calculator can help you plan every aspect of your Personal Loan.