Personal Loan EMI Calculator
Personal Loan EMI
A Personal Loan Equated Monthly Installment (EMI) is the monthly payment you make towards repaying your personal loan. Personal loans are a type of unsecured debt, offered by lending institutions, that cater to various financial requirements. They don't require any collateral, and their flexibility means they can be used for a wide range of purposes, from home renovations to overseas vacations.
The amount you can borrow as a personal loan typically ranges from Rs. 10,000 to Rs. 40,00,000. The tenure of this loan can go anywhere from 12 - 60 months. The key factors that influence the EMI you pay each month are the principal loan amount, the rate of interest charged by the bank, and the tenure of the loan.
For example, if you borrow Rs. 10 lakh for a 3 year period at an interest rate of 15% per annum, the total payment made over the entire loan tenure would come up to Rs. 12,47,940.
How to use Personal Loan EMI Calculator
A personal loan EMI calculator is a handy tool that helps you plan your loan repayment. Here's a simple guide to using an EMI calculator:
First, input the loan amount and the loan tenure. For the sake of this example, let's go with a loan amount of Rs. 10,00,000 for a tenure of 3 years.
Next, provide the personal loan interest rate and the processing fee charged by your bank. Let's assume an interest rate of 15% and a processing fee of 1.5% of the loan amount.
The calculator quickly computes your monthly installments, total interest payable, and total payment made during the entire loan duration. In our example, this gave us monthly installments of Rs. 34,665, total interest payable of Rs. 2,47,952, and total payment of Rs. 12,62,952.
The calculated annual percentage rate (APR) comes up to be around 16.073%. This rate, which takes into account the processing fee, can be used to compare loan offers from different institutions.
The calculator also provides a detailed account of your periodic principal and interest payments, and the outstanding loan balance at any time.
Example of Personal Loan EMI Calculation
Let's consider a practical example where a personal loan of Rs. 10 lakh is taken for a Europe trip with an interest rate set by the bank at 15% per annum, and the loan tenure is 36 months or 3 years.
Using the method mentioned above in the personal loan EMI calculator, we can find the monthly instalment (EMI), which turns out to be Rs. 34,665. The total payment over the entire loan tenure of 36 months comes to Rs. 12,47,940.
These figures serve as an excellent guide in determining whether the loan is affordable and within the boundaries of the borrower's financial capacity. By calculating the EMI in advance, it enables potential borrowers to make an informed decision, planning their monthly budget accordingly, and avoiding any negative impacts on their financial health.
This personal loan EMI calculator, thus assists in devising a well-planned borrowing strategy, ensuring you don't bite off more than you can chew. It offers a clear picture of the loan and the finance involved, empowering you with knowledge and promoting responsible borrowing.