Sometimes, every person needs a little help to make ends meet. Whether it is due to an unexpected financial emergency or a long-term goal, a personal loan can provide the necessary funds. However, with any loan comes the responsibility of repayment. That is why it’s important to plan your repayments in advance, so you can be sure that you can make timely repayments and avoid any penalties or fees.
To help you plan your repayments, most lenders offer a personal loan EMI calculator on their website. With this online tool, you can take most of the guesswork out and create a favourable loan structure based on your loan amount, interest rate and repayment tenure. Here are 4 ways a personal loan EMI calculator helps to plan your repayment better and make financial planning much easier.
- Helps to calculate your monthly instalments and plan your budget accordingly
You can use a personal loan EMI calculator to know exactly how much you need to pay monthly to repay your loan. This includes both the principal amount and the interest charged on the outstanding loan amount. All you need to do is enter these 3 parameters – loan amount, interest rate and repayment tenure – into the personal loan EMI calculator for an instant estimate. Moreover, most calculators also offer a visual representation of the estimates, thus helping you grasp your loan details quickly in one single glance.
- Helps to choose flexible repayment tenures
Most lenders offer repayment tenures ranging from 12 to 60 months. You can use a personal loan EMI calculator to see how different repayment tenures impact your monthly instalments. A longer tenure would mean lower EMIs, but you end up paying more in terms of interest payments as compared to a shorter tenure where EMIs are high but total interest outgo is lower. Choose a tenure that suits your current financial needs and future repayment capacity.
- Lets you compare different lenders and select the right one
Different lenders offer different personal loan interest rates and terms and conditions. By using a personal loan EMI calculator, you can compare not only your monthly instalments but also overall cost i.e., total principal + total interest payable, with different lenders before zeroing in on one. This way, you can ensure you are getting a fair deal that does not put any undue strain on your finances and you can click the personal loan apply button with more confidence.
- Provides a loan amortisation schedule
With most personal loan EMI calculators, you will be provided with a loan repayment schedule which shows how much of each payment goes toward interest and how much goes toward principal (the borrowed amount). You may also personalise the loan amount and tenure using the EMI calculator, keeping in mind your personal loan eligibility and repayment capacity.
A personal loan EMI calculator empowers you to compare different lenders quickly, avail loans at competitive rates and, most importantly, come up with a solid repayment plan. However, it should be noted that the estimates are based on the interest rate, term, and how much money you borrow. So, input these details accurately while using the calculator for more accurate results.