06 DECEMBER, 2022

Financing options like a personal loan come in handy to meet a wide variety of goals at different stages in life. Whether you want to buy your first car, upgrade your phone, go on a vacation, pay for higher education, renovate your home, fund your wedding, or start your business – a personal loan can help you with that. But before you take a personal loan, it’s crucial to understand what it will cost you and how much your Equated Monthly Instalment (EMI) obligation would be. For this, you can use a personal loan EMI calculator.

The thing about a personal loan EMI calculator is that it not only helps you before you click on that personal loan apply button, but it also helps you manage your existing loan as it has several benefits. Here are all the ways you can use a personal loan EMI calculator for better financial management:

  • Opt for a loan amount you can easily repay

When you use a personal loan EMI calculator, you enter the loan amount you require, the estimated personal loan interest rate, and the repayment tenure you prefer. Based on these inputs, the calculator shows you what your EMI will look like and what your total interest burden on the loan will be.

You can extend the tenure to reduce your EMI amount so that you can meet your dues comfortably over a longer period or you can opt for a shorter repayment tenure so that your overall interest outgo reduces, making the loan cheaper for you. By adding different permutations and combinations of such data, you can arrive at a personal loan that is affordable and convenient to pay back.

  • Compare lenders and pick the best offer

A personal loan EMI calculator is an online tool which is available to use for everyone free of cost on most reputed lenders’ websites. So, you can check different personal loan offers by your shortlisted lenders and use the EMI calculator to compare them.

This way you can see which personal loan offer is the best for you in terms of the EMI amount, interest outgo, repayment tenure, etc. You can use the EMI calculator as many times as you would like, and it would help you arrive at an accurate estimate without having to go through the hassle of manual calculations.

  • Consider a balance transfer

An important part of loan management is considering a balance transfer during the repayment period. If another lender is offering a lower personal loan interest rate and better loan terms then you can apply to transfer the balance of your existing personal loan from your current lender to the new lender.

To decide whether this is a strategic move or not, you can use the personal loan EMI calculator. By comparing your existing personal loan EMI and the new lender’s personal loan EMI offer, you can see how much money you would save if you opt for the balance transfer. Do note that there are certain charges you will have to incur such as prepayment charges and processing fees so remember to account for them when determining your overall savings from a balance transfer.

As you can tell, a personal loan EMI calculator is a handy tool right from the beginning when you are considering applying for a loan to the end until you have paid the loan off. Hence, make sure to use this calculator to your advantage when undertaking financial planning and management.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.