Every individual strives hard to accumulate resources for the accomplishment of their life goals. However, there are times when your hard-earned savings might not suffice. In that case, personal loans come into the picture to help you chase your aspiration. With personal loans, you obtain financial assistance for achieving your ambitions with ease.
When you avail a personal loan, an individual repays the loans in the form of installments. These installments are known as Equated Monthly Installments (EMIs). Before opting for personal loans in India, let’s begin by understanding what EMI is. Take a look below:
What is Equated Monthly Installment (EMI)?
An Equated Monthly Installment is the repayment of the principal amount and the interest rates. Ideally, the EMI amount is fixed and paid to the loan provided by the end of every month. Initially, the interest is higher, which gradually decreases further to a successive payment.
Before you invest in personal loans, it is crucial to calculate the EMIs on your personal loans. It will help you to determine the amount that will go out of your pockets every month, keeping the interest rates in mind. Therefore, take a look below to understand the workings of a personal loan EMI calculator:
What is a Personal Loan EMI Calculator?
A personal loan EMI calculator is a tool that allows you to calculate the EMI for a personal loan. When you use a personal calculator, you get a rough idea of your estimated amount. Moreover, the estimated amount helps you to analyze your financial status before applying for a personal loan.
Calculating an EMI for a personal loan is no rocket science. The calculation process is easy as a majority of personal loan companies provide you with these calculators on their online portals. All you have to do is submit accurate information to get the right amount. Fill in the following details mentioned below:
1. Loan amount
Utilize the slider for selecting the desired amount for your personal loan.
2. Interest rate
Fill in the interest rate provided by the personal loan companies. Do not change the value as per your preference.
3. Loan tenure
To calculate your EMI correctly, make use of the slider to choose the duration of your loan. The higher the tenure, the lower the EMI value.
How to calculate EMIs?
To calculate the EMI, one must compulsorily follow the EMI calculation formula. Given below is the formula to measure your EMI accurately:
E = [P x R x (1+R) ^ N] / [(1+ R) ^ N – 1] wherein,
E stands for Equated Monthly Installment
P stands for Principal loan amount
R stands for Rate of interest
N stands for the number of months
Follow these steps given below to calculate the EMIs for personal loans. Take a look below:
Step 1: Enter the loan amount you wish to borrow
Step 2: Fill in the personal loan interest rates set by the company
Step 3: Select either the tenure of repayment or the tenure of your personal loan
Step 4: Calculate the EMI and pay the amount accordingly
To sum up, a personal loan must be taken keeping the tenure in mind. The tenure of your loan impacts the EMI value. In simpler terms, the longer the term, the lesser, the EMI, and vice versa. Therefore, to save more money on the EMIs opt for a longer tenure.