What is a Personal Loan EMI Calculator?
A personal loan is an unsecured credit instrument offered by banks and other lending institutions. It does not require any collateral or security and is approved with minimal documentation. The borrower can use the fund to meet any financial need.
Just like any other loan, a personal loan is also paid in EMIs. A personal loan EMI calculator helps you determine the EMI and interest payable on the borrowed amount. It is a simple-to-use tool that enables you to plan your finances better.
How Does Personal Loan EMI Calculator Work?
A personal loan calculator is a financial planning tool that shows you the monthly installment, interest payable, and the total repayment amount. You can use a personal loan interest calculator and determine your repayment details by filling in the following details:
Loan Amount: The amount of loan you want to borrow from the lender.
Loan Tenure: The time period you choose for the repayment of the loan.
Interest Rate: The rate of interest charged by the lender on the loan amount.
The personal loan EMI calculator uses the entered details and shows you accurate figures related to loan repayment. You can conveniently change the inputs and get different results to decide the best amortization plan according to your repayment ability.
Formula to Calculate Personal Loan EMI Interest
The formula required to calculate personal loan EMI is P x R x (1+R)^n/{(1+R)^n-1} where,
P- The principal amount borrowed in the personal loan
R- Rate of interest charged by the lender on the approved loan amount
n- Loan repayment tenure in months
Let us understand how personal loan EMI is calculated with an example:
Suppose Mr. A borrowed Rs 1,00,000 personal loan from a lender for a period of 3 years at an applicable interest rate of 15 percent.
Here,
P (Principal loan amount) is Rs 1,00,000
n (Loan repayment tenure in months) is 3x12 = 36 months
R (rate of interest) is 15/(12x100) = 0.0125
By putting the figures in the formula we get:
EMI = 100000 x 0.0125 x (1+0.0125)^36/34
EMI = Rs 3,467
Interest payable on principal = Rs 24,793
Total repayment amount = Rs 1,00,000 + Rs 24,793 = 1,24,793
Doing manual calculation using the formula requires much time and effort and is prone to errors. You also need to redo the calculations if you want to change any of the variables. A personal loan EMI calculator comes in handy and does all the complex calculations within no time. With a pl EMI calculator, you can save time and effort and change variables easily to arrive at the best loan amortization plan.
How to Use Personal Loan EMI Calculator?
To use a personal loan interest rate calculator, you will need to follow a few basic steps:
- Open a personal loan EMI calculator online on your internet browser. There are a number of online personal loan calculators available. Choose INDmoney’s EMI calculator to check the detailed breakdown of your loan repayments.
- Enter the amount of loan that you wish to borrow.
- Select the time period for repayment of the loan and enter your preferred interest rate.
- The personal loan EMI calculator will show your EMI and other necessary repayment details instantly.
- The EMI calculator also allows you to change the loan requirement details so that you can plan the repayment in advance by knowing different amortization plans.
All these happen within a few simple clicks and right at your fingertips.
Advantages of Using INDmoney’s Personal Loan EMI Calculator
INDmoney’s personal loan calculator is a simple yet highly functional tool that can calculate your loan EMI in a moment. There are a number of perks of using INDmoney’s personal loan EMI calculator.
- INDmoney’s personal loan calculator is an online tool that can be accessed from any device that has a working internet connection. You can calculate your EMI even on the go without doing any calculation.
- With prior knowledge of the loan EMI and amortization schedule, you can plan your repayment accordingly. This helps to remain financially able and be well-planned for the loan repayment.
- By changing the inputs in INDmoney’s online personal loan calculator, you can compare personal loan offers from different lenders. This assists you get the best offer at the lowest possible cost.
Why Should You Take a Personal Loan?
Financial emergencies are uncertain and can knock on your door in any form. You might face a medical emergency and need money to pay hospital bills or have to make a sudden travel plan but fall short of cash, in any such case, a personal loan can help you meet your immediate financial needs and overcome the situation easily. A personal loan has a number of benefits over types of credit instruments.
Easy Approval
A personal loan is mostly required to meet immediate financial needs, thereby, it is approved easily by the lenders and the amount is disbursed as quickly as possible. There are a number of online lenders who approve personal loans within a few minutes. You can apply for a personal loan online and get money disbursed to your bank account without any hassle.
Minimal Documentation
You do not need to go through complicated documentation and formalities for taking a personal loan. Lenders only ask for your KYC documents and income details. The loan is approved immediately once the submitted details are verified.
Flexible Usage
You can use the sanctioned personal loan amount anywhere and for anything. The freedom to use the loan amount is the main reason behind the popularity of personal loans.
No Collateral Required
A personal loan is a type of unsecured loan. You do not have to pledge any collateral with the lender while applying for a personal loan. This makes it easy for one to apply for a loan even if he/she does not have any assets to keep as a mortgage.
Frequently Asked Questions
What is the minimum salary requirement for a personal loan?
You can get a personal loan even if you have a salary of Rs 10,000. However, you must check your eligibility as different lenders have different salary requirements for loan approval. Make sure you do not have any running EMIs and keep a clear financial record to fast pace the loan approval process.
What is the maximum tenure of a personal loan?
Most banks and other financial lenders offer up to 5 years of loan repayment tenure.
Can I get a personal loan without any credit score?
It is always recommended to have a good credit score to get the best personal loan offers easily. However, even if you do not have a credit score, you can still get a personal loan from some lenders.
What are the documents required to get a personal loan?
You need to submit only a few documents while applying for a personal loan:
- Identity proof (Aadhar card or PAN card)
- Income proof (Bank statement or salary slip)
- Address proof (Aadhar card or Voter id card)
The final documentation requirement varies from lender to lender.
What are the extra charges on a personal loan?
Lenders charge 1-2% of the sanctioned loan amount as a processing fee in order to cover the expenses of paperwork and formalities involved. However, you can get the processing fee waived off if you have a long-term association with the lender.