Planning your monthly expenses is important when you take out a personal loan. It helps you stay prepared and organised. The EMI calculator may help you know how much you may need to pay every month. You just need to enter a few details to get the results. This simple calculator also helps in managing your finances. Many people use an EMI calculator to make a proper repayment plan. This article explains how to plan your personal loan EMIs with the help of online calculators.
What is a Personal Loan?
A personal loan is a type of unsecured loan. This means you do not need to pledge any assets to the lender. People usually take personal loans for various needs. These may include travel, education, medical expenses, or important purchases. The loan is repaid in equal monthly payments over a fixed period. The amount and duration are decided at the time of the application process. The interest charged depends on the lender’s policies. You can use an EMI calculator online to check your expected monthly payments before applying.
Personal Loan Interest Rates
Personal loan interest rates vary depending on the lender and your credit score. Some lenders may charge high rates based on your profile. Additional factors such as loan amount, repayment history, and income also affect the interest rate. Some lenders offer fixed interest rates, while others offer reducing interest rates. In a reducing balance loan, interest is charged only on the remaining amount.
Eligibility Criteria for Personal Loans
Before applying for a personal loan, it is important to check the basic eligibility criteria. The usual eligibility criteria for a personal loan are as follows.
- Age Limit: The applicant must be at least 21 years old and not more than 60 years old at the time of final repayment.
- Income Requirement: A regular monthly income is required. Salaried and self-employed individuals both can apply.
- Employment Status: For salaried persons, the employer needs to be a listed private or government organisation. For the self-employed, a stable business is required.
- Credit Score: A good credit score increases your chance of loan approval. It also helps to get competitive interest rates.
- Loan Amount Limit: The approved loan amount depends on your income, repayment capacity, and credit history.
What is an EMI Calculator Online?
The EMI calculator is a tool that helps you calculate your monthly loan repayment amount. It needs basic information like the loan amount, interest rate, and loan duration. Once you enter these details, the calculator gives your EMI amount. It also shows the total payable amount and interest charged. The calculator works instantly without requiring personal data. You can use an EMI calculator to compare different loan options. This helps you select a plan that aligns with your needs and repayment capacity.
Benefits of Using an EMI Calculator Online
Here are some of the benefits of using an EMI calculator:
- Easy Estimate of EMI Amount: The calculator gives an idea of your monthly payment. This helps you understand how much you may need to pay every month.
- Avoid Manual Errors in Calculation: Manual calculations may lead to mistakes. The calculator reduces the chance of such errors and provides instant results.
- Compare Different Loan Plans: You can change the loan amount, interest rate, and duration to see different results. This allows you to compare different loan options. Whether you’re planning a personal loan or any other loan type, it helps you understand how small changes in rate or tenure can affect the total repayment amount.
How to Use an EMI Calculator Online
Using an EMI calculator online is simple and does not take much time. You just need to enter:
- Loan Amount: This is the total amount you wish to borrow.
- Interest Rate: This is the rate of interest charged by the lender.
- Loan Tenure: This is the period over which you plan to repay the loan.
Once you enter these, the calculator shows the EMI, total interest, and total repayment amount.
Conclusion
An online EMI calculator helps you easily plan your personal loan EMIs. It shows the monthly payment, total interest, and total repayment. You can try different loan amounts, interest rates, and tenures to see what aligns with your monthly budget. You do not need to do any manual calculations or share personal details. With the EMI calculator, you can prepare your repayment plan in advance. Always check your loan eligibility and compare different plans before making a final decision.
