Even before you start searching for a lender to get a personal loan, you should first ensure whether or not you’d be able to afford its monthly EMIs. Many of the lenders in India now offer online EMI calculator to provide an accurate analysis of your personal loan EMI.
EMI or Equated Monthly Instalment is a crucial part of a personal loan. It is a fixed amount that you’ll have to pay every month to the lender against the borrowed amount. The monthly payments are calculated by combining the amount that you’ve borrowed divided by the loan tenure and the interest charged by the lender. As you pay the EMI each month, the amount is deducted from your overall outstanding.
Even before borrowers start searching for a lender for a personal loan, it is very important that they at least have a fair idea of what their EMI would be for the amount they’d like to borrow. In the past, the only way to know this was by getting in touch with the lender or through complex manual calculations. Fortunately, many lenders now have EMI calculators on their website to make the calculation simple and quick.
If you are planning to take a personal loan, there are a few ways in which such EMI calculators can help-
- Know the right EMI for You
An EMI calculator lets you adjust the loan amount, loan tenure and interest rate. Based on what you enter, the calculator then calculates your EMI. For instance, if you’ve selected the loan amount as Rs. 5 lakhs, tenure as 4 years and interest rate as 14%, the calculator would instantly provide you with the EMI amount as Rs. 13,663.
If you feel that the EMI amount is too expensive, you can try reducing the loan tenure or loan amount to reach to an amount that you can easily afford each month.
- Select the Right Tenure
Most borrowers are often confused when it comes to selecting the right tenure of their loan. While longer tenures mean lower EMI, you’d be required to pay higher overall interest on the loan. On the other hand, shorter tenure might make the EMI unaffordable.
EMI calculator helps eliminate this confusion. You can keep adjusting the loan tenure until you reach an affordable EMI amount.
- Helps Negotiate the Interest Rate
If you fulfil the eligibility criteria of the lender, you generally get to choose the loan amount and loan tenure. But what a lot of borrowers do not know is that eligible borrowers can also try negotiating the interest rate with the lender, especially if they have an excellent credit score and no other loan liabilities.
You can use the calculator to check how the changes in interest rate affect the EMI amount and then you can use the information to try and get a better deal.
- See the Amount you Should Borrow
A very common mistake that a lot of eligible borrowers commit is borrowing more than they need or can afford. Loan EMI calculator is a great way to know that the amount you borrow will make the EMI easily affordable.
Moreover, if you haven’t gone through the lender’s website and have directly landed on their EMI calculator, you can still easily check the minimum and maximum amount that a lender offers in the calculator.
- Select the Right Lender
Last but not the least, a personal loan EMI calculator also helps you select the right lender as per your needs. The maximum personal loan amount, tenure and interest rate vary significantly between most of the lenders in India.
With the help of the calculator, you can easily know whether the lender is offering the best deal on the amount you’d like to borrow.
EMI calculator is one of the most useful online tools for borrowers which provides them detailed information about their loan EMI even before they get in touch with the lender. It is quick, easy-to-use and provides accurate results to ensure enhanced convenience. If you are looking for a personal loan and don’t know where to begin, one such calculator could certainly help.