Published on: 29 November 2021
Modified on: 10 April 2023
Highlight: Using an EMI calculator is essential before a potential borrower takes out a personal loan. Personal loans are even more accessible now on Fibe!
A personal loan is a credit instrument that has recently gained a lot of appeals, as it is an unsecured loan. It means you don’t have to submit or pledge any assets as security to get a personal loan.
The best part is that the borrowed funds can be used for almost any purpose. Personal loan disbursement is also very quick, usually done within one or two working days after approval.
You need to pay the principal amount and the generated interest whenever you take a personal loan. Hence, it’s extremely crucial to accurately calculate your EMI or equated monthly instalment before you take up a personal loan to avoid any inefficiencies. But how is EMI calculated for personal loan?
Instead of calculating EMI manually, people have started to use online calculators. A lot of banks provide a free-to-use calculator on their online websites. The formula for personal loan EMI calculator is available online now.
When you use an online calculator, you get an idea of the monthly amount you have to repay during your tenure. This is quite helpful as borrowers get an idea of the influence of the loan on their spending and lifestyle.
Remember! Interest rates vary from bank to bank. You must compare each interest rate before choosing the loan plan which best suits your long-term goals.
Let us now look at why a personal loan EMI calculator is important and beneficial to potential borrowers.
Once you have gathered all the information on the due amount, you’ll have to repay monthly, planning the rest of your expenditure and savings becomes much easier. When you know the formula for the personal loan EMI calculator, you can also chart out all your pending or future loans and gather an idea about all the EMIs you are due. Knowing about your state of finances in advance is always a good idea.
EMI calculators allow you to choose the best-suited tenure plan for your loan. If you decide to pay a significant number of EMIs to reduce the interest rate on loan, the loan’s tenure will be longer and vice versa. You can change the loan’s value and number of EMIs to find the most effective loan tenure possible. You can also experiment with different loan amounts and tenure to find out the most convenient plan.
Prior knowledge of your financial statement will always help you maintain a good credit score. If you know all of your EMIs beforehand, chances of missing out on repayment of the loan amount are slim. This is important as avoiding a poor credit rating is very crucial.
On the other hand, you have to enter your credit rating on the calculator before it provides you with a figure. If it’s bad, then you have to pay increased interest rates. Improve your credit scores in this case.
The interest you must pay should be the first thing to check out when taking a personal loan. Rates of interest vary depending on the tenure of the loan and the EMI. The calculator makes your job significantly easier by allowing you to choose and test out with different values till you get the best rates suited for you.
The calculator will let you know whether you are eligible for the loan or not based on the information you provide. The formula that will be used on the calculator varies from loan to loan. You may not be aware, but different formulae are used to calculate different sorts of loans. As a result, you won’t have to worry about manually calculating it or wondering if the correct formula was applied. Hence, all the calculations are accurate.
EMI calculators are easily accessible and easy to use as they are online. Customizing the calculator based on your preferences and comparing the different combinations of interest rates and tenure to choose your perfect plan makes the whole process very appealing.
So worry no more wondering, “how is EMI calculated for a personal loan?” Taking out a loan for all your expenses, be it shopping, traveling or education is now even more convenient with Fibe. With fast disbursal and no prepayment charges, you no longer have to worry about your budget. Opt for an EMI calculator to experience a seamless loan tenure to be on the safer side!
How is personal loan EMI calculated?
Personal loan EMI is the fixed amount you pay a lender every month by a certain date. Taken together, all your personal loan EMIs are the way you repay your loan. They consist of both the principal amount you have borrowed and the interest charged on your .
Personal loan EMI is calculated based on the below 3 factors:
How to calculate Personal Loan EMI manually?
Using the mathematical formula below, you can compute your loan EMI manually:
EMI = P × r × (1 + r) n/ ((1 + r) n
What are the benefits of a loan EMI calculator?
Manual calculation can be time-consuming and prone to errors. You can simply use Fibe’s and get the amount online in seconds.
Here are a few key benefits of using this free digital tool:
Category : Personal Loan
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