Must-know aspects of a personal loan EMI calculator

Posted on Tuesday, November 28th, 2023 | By IndusInd Bank

In a world focused on financial planning and decision-making, the availability of tools that simplify complex calculations is a boon. One such tool that has gained immense popularity in India’s lending landscape is the personal loan EMI calculator.

With the rise of personal loans as a preferred choice for meeting various financial needs, understanding the nuances of equated monthly instalments (EMIs) and the functionality of personal loan EMI calculators has become crucial. Let’s explore the must-know aspects of EMIs and personal loan EMI calculators.

What is a personal loan EMI calculator?

A personal loan EMI calculator is a digital financial tool designed to aid you in estimating your monthly EMI obligations accurately. It simplifies complex calculations involving loan amounts, interest rates and loan tenures and provides you with a clear and instant picture of your repayment commitments.

Typically offered by banks, financial institutions and online platforms, the personal loan EMI calculators empower you to make informed decisions regarding your borrowing needs.

How to use a personal loan EMI calculator?

Using a personal loan EMI calculator is simple. With just a few inputs, you can calculate your EMI almost instantly. You need to input the following details:

• Loan amount: Begin by entering the principal loan amount you intend to borrow from the lender. This figure forms the basis of your borrowing.
  
  
• Interest rate: Input the applicable interest rate that the lender offers. The interest rate can vary based on factors such as the lender’s policies, your profile, credit history and the prevailing market conditions.
  
  
• Loan tenure: Specify the duration over which you plan to repay the loan. This is typically measured in months or years. The loan tenure directly influences your EMI amount.

Once you’ve entered the above details, the calculator computes your EMI instantly, along with the total interest you will be paying over your loan tenure. It provides you with a clear indication of the monthly repayment commitment associated with your chosen loan parameters.

Benefits of using a personal loan EMI calculator

The advantages of employing a personal loan EMI calculator are numerous and they extend beyond just simplifying calculations:

• Accurate financial planning: Personal loan EMI calculators provide a precise estimate of your monthly EMI obligations and total interest payment during the loan tenure. This accuracy is invaluable for planning your finances effectively. This ensures that your monthly budget aligns with your repayment capacity.
  
  
• Comparison tool: These calculators serve as a powerful tool for comparison. You can experiment with different loan amounts, interest rates and tenures to identify the loan structure that best suits your financial circumstances.
  
  
• Preventing over-commitment: By offering a clear view of your potential EMI, personal loan EMI calculators prevent you from committing to loan obligations that might strain your finances. This transparency is crucial to avoid overstretching your finances.
  
  
• Informed decision-making: Armed with precise EMI figures and the total interest payment, you can make informed decisions about your borrowing. You will know exactly what you are signing up for and how it impacts your financial situation. It helps you select the right lender for your personal loan needs.

For instance, you can use the IndusInd Bank Personal Loan EMI Calculator to select an EMI amount that aligns with your financial goals.

• Time efficiency: Personal loan EMI calculators eliminate the need for manual calculations. This saves you significant time and effort. You can access crucial financial information in a matter of seconds.
• Visibility into interest outgo: These calculators not only reveal your EMI but also provide insights into the total interest you will pay over the duration of the loan. This knowledge gives you a clear understanding of the overall cost of borrowing.

Factors affecting your personal loan EMI

To truly comprehend your EMI obligations, it is essential to understand the factors that influence your EMI and total interest payments:

• Principal loan amount: The most direct influence on your EMI is the principal amount borrowed. As you might expect, a higher loan amount leads to larger EMIs.
  
  
• Interest rate: The interest rate significantly impacts your EMI. A higher interest rate translates to higher EMIs and greater overall interest payments over the loan tenure.
  
  
• Loan tenure: The duration over which you choose to repay the loan is a pivotal factor. A longer tenure results in smaller EMIs but higher interest costs. Conversely, a shorter tenure leads to larger EMIs but lower interest expenses.

Your personal loan EMI comprises two components i.e., the principal and the interest. Initially, a significant portion of the EMI goes toward interest payments. Over time, the proportion allocated to the principal increases while interest payments reduce. You can use the amortisation schedule / repayment schedule to know how much portion of your EMI is allocated to interest / principal repayments, respectively.

The ideal online personal loan

Getting an ideal personal loan involves making informed financing decisions by choosing the right lender. IndusInd Bank offers personal loans at affordable interest rates and for flexible tenures. The following are the benefits when you apply for personal loans with IndusInd Bank:

• Affordable interest rates: IndusInd Bank offers personal loans at interest rates starting from 10.49% p.a.
• Quick processing: With an instant personal loan, you do not have to wait for long. You can apply for a personal loan online with a 100% paperless application process and get your loan approved instantly.
• No collateral and guarantors required: You do not need any collateral security or guarantor to apply for an online personal loan.

In India’s dynamic financial landscape, where personal loan plays a significant role in addressing diverse monetary needs, being equipped with tools that promote financial literacy is essential. Personal loan EMI calculators encapsulate the essence of such tools, offering a user-friendly interface that simplifies complex financial concepts.

So, whether you are considering a personal loan for a vacation, a medical emergency, or any other financial endeavour, harness the power of the personal loan EMI calculator to make your borrowing journey smoother, more informed, and ultimately, more rewarding.

Summing up

With tools like personal loan EMI calculators at your aid, you can navigate your borrowing journey with confidence and awareness. By visualising the potential cost of borrowing and understanding the factors that shape your EMI, you can tread the path of responsible borrowing.

With such tools at your aid, you can navigate your borrowing journey with confidence and awareness. By visualising the potential cost of borrowing and understanding the factors that shape your EMI, you can tread the path of responsible borrowing.

IndusInd Bank can be your trusted partner in this journey. The bank offers a 100% digital application process, along with instant approvals and quick disbursals. This allows you to get the funds you require instantly. The competitive interest rates and flexible repayment tenures allow you to plan your budget accordingly, ensuring you never miss your payments and can maintain a positive credit score. So, what are you waiting for? Apply for an IndusInd Bank Personal Loan now!

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.