Before purchasing any financial product, you need to understand how it can impact your lifestyle. A personal loan EMI calculator is a great tool for this purpose. It will help you see whether you will be eligible for a loan and whether it is suitable as per your income level.
This way, you won’t apply for a personal loan which could get rejected. If banks find your credit score and repayment capability not sufficient enough for loan approval, this could downgrade your credit score.
So, in a way a personal loan calculator could save you the hassle of applying to multiple lenders at a time, which is not advisable. You can simply choose to approach the bank that offers the best interest rates and repayment tenor.
Before we look at the benefits of using this tool, let us understand the way it works.
How the Personal Loan EMI Calculator Works
The calculator is available online and very simple to use. You just need to provide these 3 inputs, and the calculator will give you the monthly EMI amount you have to pay accordingly:
- Loan Amount- Principal loan amount offered by the bank.
- Loan Tenor- The period of loan repayment
- Interest Rate- The percentage of the loan amount that you need to pay back to the bank, along with the principal amount.
Benefits of Personal Loan EMI Calculator
1. Helps to Plan EMI Payments Based on Monthly Budget
By knowing the repayment amount, you will understand how to plan your monthly budget. You can keep this amount separately so that you don’t miss out on payments. Doing that could lead to a poor credit score. Further, when you consider the bank charges like processing fees, penalty payments, and swap fees, and so on, you get to know the exact amount you will have to pay to repay the debt.
2. To Make an Informed Personal Loan Decision
The personal EMI loan calculator can be customised to suit your needs. By entering a mix of various figures, you understand whether the bank can provide you favourable interest rates or the desired loan tenor to suit your needs.This will also help you decide what loan amount you can take without disrupting your daily lifestyle.
You can choose to compare interest rates and repayment tenor offeredby multiple lenders before you apply for a personal loan.
3. Accurate Results in a Matter of Seconds
Rather than spending a lot of time in complex calculations, you can simply enter the numbers and find out your EMI amount. This is extremely important when you want to attend to emergency financial needs. There would be no chances of errors, to cause future problems.
Use the personal loan EMI calculator as a DIY self-learning tool. You get to avoid a financial planner or a banker explaining the tough calculations to you. This helps to get rid of confusion and leads to better financial planning. All these works towards building and preserving a good credit score.