Money can be a great facilitator in making your dreams come true. However, sometimes all you need is a little help to achieve your financial goals. This is where a Personal Loan comes in handy. In this article, we’ll explore the ins and outs of it and how you can derive at your repayment schedule using an EMI calculator. Discover more by reading on.
The Personal Loan: An Overview
A Personal Loan is a type of loan you can get without collateral or security. Whether you want to renovate your house, support your child’s higher education, plan a trip, or pay for a medical emergency, a Personal Loan is the way to go.
The process of taking out a Personal Loan is easy and hassle-free, with minimal documentation. Moreover, it gets easily approved and thus is the perfect choice to cover any emergency expense. You are free to use your Personal Loan in any manner you seem fit.
It has a flexible repayment tenure merged with lower rates of interest, making it the ultimate choice for many individuals.
Calculating Personal Loan EMI: Factors to Consider?
Similar to any other type of loan, while taking out a Personal Loan, there are a few critical things that you should keep in mind. First and foremost is the amount of EMI you need to pay every month. Listed below are the top three things you should consider for a smooth process of your Personal Loan EMI calculation:
Amount:
The loan amount you wish to take out is one of the most important factors that determines your EMI amount. The higher your loan amount, the more will be the EMI payable. The lender or financial institution decides the amount of the loan based on certain factors like your credit history and score, your repayment capacity, and other factors.
To ensure that you get your desired loan amount, make sure to maintain a good CIBIL score, a stable relationship with the bank, and lengthy credit history.
Interest Rate:
A personal Loan EMI calculator must be taken into consideration while applying for a loan. Moreover, the interest rate applicable is also an important factor. The higher the interest rate, the higher will be your EMI amount. The interest rate is determined based on certain factors like your income, financial stability, credit history and score, and repayment capacity.
It is crucial to keep in mind that the better the credit score, the better (lower) will be your rate of interest.
Loan Tenure:
The loan tenure is inversely proportional to the amount of your EMI. The longer tenure you have, the lower will be your EMI amount. The loan generally ranges between 12 to 60 months, and the longer the tenure, the interest rate and total interest cost will be higher.
How Can You Use the EMI Calculator For Your Benefit?
In today’s digitally advanced and modern era, the calculation of your EMI has become highly easy and streamlined. The calculation of the amount of EMI with the Personal Loan EMI calculator can be done in no time. All you are required to do is enter the interest rate, loan tenure, loan amount, and the monthly EMI amount will be derived.
Conclusion
When it comes to availing of a Personal Loan, it is necessary to be aware of the amount you are required to pay every month. Using the EMI calculator can help you streamline your budget and make sure that you don’t miss out on making any payments. Moreover, you can reap the benefits of an EMI calculator to evaluate different loan scenarios and choose the best one as per your financial stability. An EMI calculator is a great way of determining the most cost-effective loan option.
FAQs
Q1. What happens if you do not make the EMI payment?
If you fail to make your monthly EMI payment, the bank or other financial institution may charge a penalty fine. Moreover, missing out on monthly EMI payments or defaulting on loans can have a dire effect on your credit score.
Q2. Can I prepay my EMI?
Yes, you can prepay your EMI. However, consulting with your lender or financial institutions is necessary, as each lender has a different set of requirements and procedures for it.
