When you take a personal loan, there are some essential details you need to go over. And one such detail is the amortisation schedule. This detail is crucial in understanding how you will repay the loan over time and will help you in effective debt management. But what is an amortisation schedule for a personal loan, and how can you calculate it? Let’s take a look. 

What is an amortisation schedule?

When you take a personal loan, there is a specific duration during which you have to pay it back. This duration is called the repayment period or the loan tenure. And this repayment is not in one go but in several small installments during the loan tenure. Also, you don’t just pay back the loan amount that you have borrowed. But along with the principal amount of the loan, you also have to pay a certain amount of interest. The amount of interest depends on the personal loan interest rate. 

The principal repayment and the interest payment are made through Equated Monthly Instalments (EMIs) of a certain amount that make it easier for you to meet your loan obligations while managing other expenses and financial goals. And an amortisation schedule is a loan repayment schedule that your lender will present when you apply for a personal loan. 

The amortisation schedule will show you how exactly you will be paying off the personal loan and how the loan amount you owe will reduce over time. The amortisation schedule provides a breakdown of the principal you’re paying, the interest you’re paying, and the outstanding balance amount each month. This table helps you have a debt repayment plan to meet all your EMI payments on time and comfortably.  

How to calculate your personal loan amortisation schedule?

You can calculate the amortisation schedule for your personal loan using a personal loan EMI calculator available online on Kotak’s website. While it’s possible to calculate it, too, manually using the EMI calculator is easier and quicker. 

All you need to do is enter the estimated personal loan interest rate, the loan amount you are borrowing, and the duration you are borrowing. Within a few seconds, the personal loan EMI calculator will provide you with an accurate estimate of not just the EMI but also the amortisation table detailing how your loan will be paid off over time. 

The calculator is free and easy to use. You can use it multiple times and add different values for the tenure and loan amount to arrive at an EMI amount better suited for you and your financial goals. 

Wrapping up

Calculating your personal loan amortisation table using the personal loan EMI calculator before you hit the personal loan apply button is crucial as it helps you understand and forecast your loan cost over time. So, make sure to calculate the table and take a good look at it before you take a personal loan.

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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.