Loans are useful for funding various personal and business expenses. However, it is crucial to consider one’s repayment capacity before applying for a loan. Once a loan is approved and disbursed, the borrower must start repaying the amount from the stipulated date. Most lenders require creditors to repay loans through EMIs. An EMI is the Equated Monthly Instalment that the borrowers pay each month over a fixed period. A person can check a loan EMI Calculator Online to determine how much they must pay the lender. Checking their expected EMI can help them ensure that they can repay the loan without compromising their essential expenses. Let’s discuss how to use the loan EMI calculator and how it can help you budget better!
The Loan EMI Calculator is an online tool to calculate your monthly EMI for any type of loan. This tool is programmed to predict your EMI amount and the total repayable sum once you input three crucial values.
If you want to check the repayment requirements for a Personal Loan, you can use a Personal Loan EMI Calculator to compute the amount. You must input three values for the calculator to determine your monthly EMI. These are as follows:
Interest Rate: The lender determines the interest rate based on internal policies. Most banks use the Reserve Bank of India’s (RBI) repo rate as the benchmark to set the interest rate. You must fill in your lender’s interest rate as a percentage value in the EMI calculator. In India, the interest rates for personal loans vary between 10.5% and 22%. You can check the interest rates from top Indian banks to estimate your interest amount.
Repayment Period: The loan tenure refers to the total time you have for repaying the amount. Personal Loans in India typically have a repayment tenure of one to five years. In some cases, lenders may agree to extend the tenure to six years. You must specify the number of months in your repayment period while entering details in the EMI calculator.
Loan Amount: The amount of money you want to borrow is a critical consideration while calculating the expected EMI. You should enter this value into the EMI calculator to determine the instalment and total repayment obligation.
You can check the estimated EMI with different values to make a choice that works for you. Try adjusting each value along the sliding scale to arrive at the expected EMI value that is affordable for you. You should consider your preferred bank’s interest rates to compute the amount.
Let’s assume that you enter the following values into an HDFC EMI Calculator:
● Rate of Interest: 13%
● Repayment Tenure: 48 months
● Loan Amount: 3,00,000
● Monthly EMI: 8048.25
● Interest Amount: 86316
● Total Amount (Principal+Interest): 386316
You can assess these figures to determine if this loan is the right fit for you. The EMI calculator can help you in the following ways:
● Plan Your EMI Payments: Knowing your expected EMI helps with better budgeting and ensures you do not miss a payment. Defaulting on these instalments can worsen your credit score. Hence, you should plan your EMI payments by checking the calculator before you take the loan.
● Calculate Your Total Cost of Funds: The EMI Calculator tells you how much you must pay the lender. Increasing the repayment tenure will give you a higher EMI but a lower cost of funds. You can use the calculator to estimate these values and make the right decision.
For more help with loans and repayment considerations, check out Your Loan Advisors today!
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