Avoid loan stress: Use an EMI calculator before you borrow

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Before taking a loan, most people only look at their eligibility and focus on whether they will get the loan or not. But what matters more is whether you can comfortably repay it. That's where an EMI (equated monthly instalment) calculator becomes useful. It tells you exactly what your monthly instalment will be based on the loan amount, interest rate, and repayment tenure. Such clarity prevents you from getting any surprises and over-borrowing.

You can compare tenures and interest expenses

An EMI calculator lets you try out different combinations of tenures of the loan. For example, if you opt for a longer tenure, your EMI reduces, but you pay more interest overall. By contrast, a shorter tenure increases your EMI but saves you on interest. A calculator helps you make a smart choice that balances affordability and cost.

It simplifies planning for your month

After you've calculated the EMI, you can include it in your monthly expenses. Assuming you make ₹60,000 and the EMI is ₹15,000, you know you'll have ₹45,000 for all other expenses. In this manner, you won't over-burden your finances and be unable to pay. A missed EMI doesn't only result in penalties but also harms your credit score.

It prevents last-minute loan application rejections

With the help of a calculator while planning, you can increase your loan sanction opportunities.

Most lenders use the EMI-to-income ratio (not exceeding 40–50%) in sanctioning your loan. Pre-calculating the EMI helps you check whether your repayment is in that range or not. If it is not, you may need to reduce the size of the loan or extend the tenure. With a calculator during planning, your chances of loan sanction are improved.

It increases your overall financial wisdom

When you notice that the repayment of your loan is going to take a few months or years, you're more likely to take the obligation seriously. This makes you better prepared for periodic payments and avoids unnecessary defaults. Whichever may be the reason behind the use of a loan–wedding, foreign trip, or emergency–the EMI calculator is a good first step towards responsible borrowing.

Do it before you apply

An EMI calculator isn't some technological gizmo—it's a money-planning tool. It only takes less than a minute to do it and can save you from costly mistakes down the line. There are downloadable free calculators on most bank and fintech websites. Take one out before you apply for your next personal loan so your repayments are easy and seamless.