Personal loans have emerged as a useful funding tool for emergency or unplanned situations. However, they involve costs in the form of interest rates and other charges. To know the true impact of a personal loan on your financial position you need to do some basic research about the costs involved and the EMIs to be paid.
The equated monthly instalment or EMI is the amount that you need to pay monthly for the repayment of your personal loan. The amount of EMI is dependent on the amount borrowed, the personal loan interest and the tenure of the loan. A clear idea about the EMI that you have to pay on your borrowings will help you plan your finances better. You can use a personal loan calculator to check about the different EMI options for a specific loan amount for different durations and interest rates.
The EMI comprises of the repayment amount for the principal amount as well as the interest on it. Here are some benefits of using a personal loan calculator:
#1: Checking Your Eligibility
The personal loan calculator is an effective way of checking whether you are eligible for a personal loan, and if yes, how much. The calculator will ask you to feed in information about your monthly or annual salary besides your credit score to tell you about your personal loan eligibility. If your credit score is poor, you may still be eligible to get a loan but at high interest rates. In such a situation, you can postpone taking the loan for some time and work on improving your credit score.
#2: Knowing the EMI
The loan calculator is an excellent tool to compare various EMI options for different tenures for the same amount of loan. You can choose the option that is feasible and easily repayable by you keeping in mind your other financial commitments. You can work to reduce your other expenses if you know the amount that you must pay back to the lender every month.
#3: Financial Planning
The calculator allows you to compare the various EMI options for different tenures and helps you choose the most suitable one keeping in mind your financial situation. You can plan your repayment schedule accordingly.
#4: Easily Accessible and Simple to Use
The personal loan calculator is easily accessible online and simple to use. All you need to provide is the amount of loan you require and tenure for which you need it. The calculator uses the applicable personal loan interest rates for providing information about the estimated EMI for different tenures. Automatic calculations by the calculator help save a lot of time and manual effort.
#5: Provides Accurate Results
The online personal loan calculator offers accurate results and thus a highly reliable tool for comparing various options and choosing the most suitable one.
Before making an instant personal loan online application, do make use of a personal loan calculator to choose the best option that matches with your repayment ability.
