Whether it’s for a wedding, a vacation, or an emergency, a personal loan can provide the financial support you need. But have you considered how it will impact your monthly finances?
Before committing to a personal loan, it’s crucial to estimate your Equated Monthly Instalments (EMIs). Analysing the EMI results along with your current obligations, savings goals, and potential future expenses will help you better assess your financial capacity and how much loan you can comfortably afford to repay.
An online personal loan EMI calculator makes this process simple and efficient, allowing you to focus on financial planning rather than time-consuming manual calculations. Let us further explore the benefits of using this tool and understand how it works.
What Are the Benefits of Using a Personal Loan EMI Calculator?
Here’s how a loan EMI calculator for personal loans can help you make informed borrowing decisions:
- Accurate EMI Calculation: By entering key details such as the loan amount, interest rate, and tenure, a personal loan EMI calculator provides an instant and precise value. This accuracy eliminates the risk of manual errors and ensures you have a clear understanding of your monthly repayment obligation. It also helps prevent overborrowing by showing the exact financial impact on your monthly budget.
- Better Financial Planning: Knowing your monthly EMI in advance allows for effective financial planning. You can allocate funds for repayment while ensuring you have enough for other essential expenses. This foresight helps you avoid unnecessary financial stress and maintain control over your finances throughout the loan tenure.
- Easy Loan Comparison: Adjusting parameters like loan amount, interest rate, and tenure lets you conveniently compare different loan options. This feature makes it easier to identify the loan terms that best suit your needs and repayment capacity.
- Saves Time: The convenience of personal loan EMI calculators allows you to redirect your time and energy to creating a sound repayment plan and researching suitable lenders.
- Promoting Clarity: Many calculators also provide insights such as the total interest payable and the total amount payable over the life of the loan, giving potential borrowers clarity about the financial commitment involved.
Keep in mind that the EMI calculator does not account for any value-added services you may have opted for with your loan, such as insurance.
How to Use an EMI Calculator for a Personal Loan?
Let’s understand how to use a personal loan EMI calculator provided by reputed lenders like SMFG India Credit.
- Enter the Loan Amount: Input the amount you wish to borrow. With the SMFG India Credit EMI calculator, you can enter a loan amount of up to INR 30 lakhs*. Remember that a higher loan amount results in a higher EMI.
- Set the Interest Rate: Next, specify the interest rate you prefer or expect. This rate is a crucial factor, as it determines the interest you’ll pay over the loan tenure and significantly impacts your EMI. Note that the final interest rate will be determined by the lender based on your credit score and other eligibility criteria.
- Choose the Loan Tenure: Select the loan tenure, which refers to the period over which you will repay the loan. The available tenure options typically range from 12 to 60 months. Opting for a longer tenure can lower your monthly EMI, making it easier to manage your budget; however, it may also result in higher overall interest costs.
- View Your EMI: Once you have entered all the necessary details, the calculator will instantly display your estimated monthly instalment. Additionally, you will receive insights into the total interest payable and the total amount payable, helping you plan your finances better.
Summing Up
By providing accurate calculations and comprehensive insights, a personal loan EMI calculator helps you better understand your financial commitment and make informed decisions.
For a thorough financial assessment, it’s important to consider factors beyond the calculated EMI, such as your monthly income, expenses, savings goals, and potential changes in income.
Additionally, be mindful of other fees and charges associated with personal loans, including processing fees, prepayment charges, and late payment penalties. While these costs may not directly impact your EMI, they do contribute to the overall cost of the loan. Be sure to read the terms and conditions carefully before signing the loan agreement to avoid surprises later on.
*EMI calculators only tell you an estimated figure. Your actual EMI, interest rate, and other
loan terms will depend on your eligibility and the lender’s policy at the time of the loan
application.