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20 JULY, 2022
Personal loans do not require any collateral and are instantly disbursed. Hence these loans are one of the most popular options for managing various expenses such as much-needed vacations, weddings, higher education, or any emergency. Before taking out a personal loan, some of the most important factors to consider are the loan tenure, interest rates, and repayment capacity.
Calculating your personal loan Equated Monthly Instalment (EMI) manually can be complicated and inefficient and could lead to incorrect values. Thus, using a personal loan EMI calculator is preferred. With this online tool, it becomes easy to plan your finances and apply for a suitable loan amount. Read on to learn more about a personal loan EMI calculator and how using it before applying for a personal loan can be highly beneficial.
What is a personal loan EMI calculator?
A personal loan EMI calculator is an online tool that can help you calculate your monthly personal loan repayments. All you need to do is enter your loan amount, estimated interest rate, and repayment tenure, after which the calculator will give you an estimate of your monthly EMIs. It can help you compare different personal loan interest rates and can help you plan your loan repayments in advance.
Benefits of using a personal loan EMI calculator before taking out a loan
If you calculate your EMI before taking out a personal loan, you can be well prepared to manage your finances and repay the loan in the given tenure. By not missing out on EMIs, you can avoid a poor credit rating and boost your future loan-taking possibilities.
Many lenders offer personal loans, so it can be difficult to compare them manually. A personal loan EMI calculator can help you compare different loan interest rates quickly. Simply input the same variables for different lenders and see which one has the lowest monthly repayments.
The interest rate is not the only factor that determines the total cost of a personal loan. There are also fees and charges that you need to consider. An EMI calculator can help you determine what is feasible and within your budget and make changes accordingly. If the EMI is too high for you, you can decrease the loan amount to lower the EMIs or increase the loan tenure to get more time for repayment.
Your interest burden is proportional to the repayment tenure. In general, if you have a longer loan repayment term, the monthly instalments would be small but at the end, you might discover that you have paid more interest. With the help of an EMI calculator, you can check the interest of multiple tenures, different loan amounts, and rates. This way, you can determine the best repayment period.
To sum up
Before taking out a personal loan, it is important to use a personal loan EMI calculator to assess your eligibility, repayment capabilities, and different interest rates. Knowing the EMI in advance can keep your budget planning intact and help you clear the loan without any financial difficulties in the future.
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