What is a Personal Loan EMI Calculator?

When you fall short on funds, borrowing is the only means. Amongst the many credit options, a Personal Loan remains the most sought-after. The reason for this is the minimal paperwork, instant processing, and collateral-free nature. It also lets you finance multiple needs. Moreover, lenders do not monitor its usage, resulting in liberty. 

Despite the flexibility, it is still a financial responsibility. You must repay it in equated monthly instalments. Hence, this is one of the primary things you should consider before opting in. If you are unsure of it, using an EMI calculator is the best way to decide. It helps you choose convenient loan terms with accurate estimates. Learn about it in detail to utilise the instrument aptly:  

Components: There are three key variables involved in the EMI calculation. They are the principal amount, interest rate, and loan tenure. They have correlated effects, and selecting them wisely is essential to increase loan affordability. Let us understand how it works: 

1. Principal amount: It is the borrowable amount that you repay along with interest. They are directly proportional to the EMIs. It means a higher loan amount results in a higher EMI and vice versa. Lenders usually sanction up to Rs. 25,000 as loan. It is subject to variation based on your eligibility. So, make sure to check the same before entering the variable to get accurate results.
   
   
2. Interest rate: This is the percentage charged on the principal borrowed. It influences the overall loan cost. Lenders have specific parameters for finalising the same, which they pre-adjust in the Loan EMI calculator. Hence, you get to select the rate and compare their offers.
   
   
3. Loan tenure: Unlike other components, the loan duration inversely influences the EMIs. A longer period leads to lower EMIs and vice versa. However, it is worth noting that a stretched tenure reduces the instalments but increases the loan cost. Hence, you should choose it after careful deliberation. 

Computation: Entering these variables in the EMI calculator online gives you instant results. It includes the break-up of the total payable amount for better understanding and shows a segregated figure for the monthly EMI, principal portion, and interest amount. This way, you get a precise idea of repayment distribution. Some tools also represent them through graphs, charts, and an amortisation schedule. 

Benefits: This is a free-to-use tool that lets you estimate the loan burden for informed decision-making. There are no restrictions on using the Personal Loan EMI Calculator. Hence, use it as many times as you like to try different possibilities. It also does not require your details except for the mentioned components. It enables you to plan your finances and manage EMIs with banking apps.