Personal Loan

EMI Calculator

A Personal Loan EMI Calculator is an online tool designed to help potential borrowers estimate their monthly repayment amount. By entering the loan amount, interest rate, and repayment tenure, users can quickly calculate their Equated Monthly Installments (EMIs). This tool clarifies monthly financial commitments, enabling better planning and decision-making for those considering a personal loan.

EMI = P * r * (1 + r)^n / ((1 + r)^n - 1)

Where:

• EMI= Equated Monthly Installment
• P= Principal loan amount
• r= Monthly interest rate
• n= Loan tenure in months

• Accurate Financial Planning
• Saves Time and Effort
• Compare Loan Offers Easily
• Promotes Financial Discipline

A step-by-step guide:

• Access the Calculator: To calculate your EMIs, use the personal loan monthly calculator.
• Enter Loan Details: Input key details such as the loan amount, interest rate, and loan tenure into the designated fields.
• Calculate EMI: Click on the 'Calculate' button to instantly view the EMI amount, along with the total interest payable and overall repayment amount.
• Adjust Inputs: Modify the loan amount, interest rate, or tenure to see how different parameters impact your EMI.
• Plan Your Repayments: Use the calculated EMI to create a monthly budget, ensuring you can make timely repayments without financial strain.

Marriage Loan:

A marriage loan can ease wedding costs, and a personal loan calculator helps you plan. Input the loan amount, interest rate, and tenure to estimate your EMI and total repayment.

Medical Loan:

A medical loan EMI calculator helps estimate EMIs for loans tailored to medical professionals. It factors in the principal amount, interest rate, and loan term, with fixed repayment terms.

Home Renovation Loan:

Home renovations, whether minor or major, can be costly and may exceed your savings. A home renovation loan offers a practical way to finance improvements. Before proceeding, it's important to assess the total cost and plan your repayment strategy.

Personal loan interest rates reflect the cost banks incur to borrow funds, as well as the risks involved in lending money without collateral. You have to consider a few key factors before applying for an instant personal loan that influence the interest rates for personal loans:

1. Borrower's Creditworthiness:

Strong credit and stable income lead to lower interest rates, while poor credit or low income result in higher rates.

2. Loan Tenure:

Longer terms often have lower rates but may include prepayment penalties.

3. Cost of Borrowing:

Rising borrowing costs for banks lead to higher interest rates for borrowers.

Personal loans can be classified into two types based on whether they are backed by collateral:

Unsecured Loans: No collateral required, therefore higher interest rates due to higher risk (e.g., vacation loans).

Secured Loans: Backed by collateral (e.g., home equity loans), therefore lower interest rates due to reduced lender risk.

Annual Percentage Rate, or APR, is computed on the net disbursed amount using the IRR approach and the reducing balance method. This is in line with the Digital Lending Guidelines issued by RBI in September 2022.

Net disbursed amount is the money that you receive in your bank account after any deduction (like processing fee).

Internal Rate of Return, or IRR, considers the expected cash flow from your bank account (money received and EMIs paid over a period), making it more comprehensive and real.

Reducing balance method - Method where interest on loan is calculated on the balance left (after paying EMI) vs Flat method where interest is calculated on the original loan amount only

The formula for APR is: APR= ((Fee + Interest)/ Principal)/ n×365) × 100

Where:

• Interest = Total interest paid over the loan's duration.
• Principal = Total loan amount.
• n = Number of days in the loan term.

Example

If you borrow 1 Lakh for 1 year at a 15% rate of interest and a 3% (+ GST) processing fee, the APR is 21.95%. The lender generally charges an APR higher than the mentioned rate of interest since it considers the processing fee and other changes.

• Consider a step-down EMI plan
• Know your lender
• Maintain a healthy credit score
• Opt for a shorter tenure
• Opt for a Balance transfer loan
• Decide on the Principal Amount of loan
• Avail loan top-up with lower interest rates
• Review eligibility criteria
• Making a part-prepayment of loan amount