Advantages of using a Personal Loan EMI Calculator over manual calculation

While you can easily choose and apply for personal loans online, knowing how much you need to borrow and for how long is essential. A personal loan EMI calculator helps you get accurate information easily. Knowing your EMIs can help you decide on a longer tenure or a lower loan amount, even if you feel you already have the best personal loan interest rates.

Further, by calculating the expenses you will incur by paying interest, you can shorten your tenure, thereby increasing your EMIs. To ensure the EMIs you choose aren’t going to weigh down your finances, calculate your repayment before you apply for a personal loan with the help of a personal loan EMI calculator.

Here’s more on how it helps and why it is essential.

How does a personal loan EMI calculator come in handy?

The manual formula for personal loan EMI calculation is EMI = [P x R x (1+R)^N]/[(1+R)^N-1]. Here, P stands for the principal, R stands for the interest rate, and N is the number of months in your tenure.

An EMI Calculator does complex calculations and gives you accurate results within seconds! Since it is available online, you can access the personal loan EMI calculator anytime and anywhere. Finally, an EMI calculator helps you choose the right loan amount by allowing you to try different combinations until you get the most affordable repayment amount and tenure.

Here is an in-depth look into how a personal loan EMI calculator helps you throughout the borrowing process. 

Helps you decide how much to borrow

The EMI calculator includes various parameters: loan tenure, loan amount, and interest rate. You can adjust and alter the figures corresponding to each parameter to check the EMIs for varying loan amounts and interest rates. This helps you determine what to borrow based on how much you can afford to repay without straining your finances.

Helps you decide on a suitable tenure

A personal loan EMI calculator shows you how tenure can impact the EMIs of your loan. A long tenure can result in lower EMIs making your repayment easier, whereas, a short tenure allows you to repay faster but has larger monthly instalments. The latter, however, does allow you to spend less on interest. Looking at the varied calculations you can make a mindful decision on the loan amount you want to borrow and the tenure to choose.

Helps you create a monthly budget

By forecasting your monthly payments with the personal loan EMI calculator, you can create a monthly expenditure budget and see what fraction of your income is utilised by the EMIs. Accordingly, you can modify your income-expenditure ratio, tweak your budget or reduce your expenditure on unnecessary expenses, so that you can afford the EMIs and still have some cash in hand for savings.

Helps you create a plan for repayment 

Computing the EMIs in advance gives you a better perspective of your financials, giving you enough room to plan your savings and investments for each month. Moreover, arriving at the EMI amounts in advance helps you revise the loan terms in case you find it overwhelming. On the other hand, you can plan to save beforehand to finance your repayment too.

Now that you know how a personal loan EMI calculator can support you in your borrowing journey, you can apply for a personal loan that is easy on your pocket. However, before applying, ensure you are aware of the documents required to process the loan. The Bajaj Finserv Personal Loan helps you have an affordable experience as it offers up to Rs. 35 lakh and gives you a flexible tenure of up to 84 months to repay, making this loan ideal for any budget or requirement. Check your offer today and get funds to meet your financial goals effectively!

Moneycontrol journalists were not involved in the creation of the article.