How does the Personal Loan EMI calculator function? What are the things to consider?

[Kanika Shelatkar]

In today’s digital age, most banks and non-banking financial companies quickly sanction Personal Loans. However, as a borrower, you need to do your due diligence before applying for one. You must make sure you are eligible for the loan and check the equated monthly instalments payable against it. The latter gets done with the Personal Loan EMI calculator. Here is how you should use the tool and things to consider while using one:

Check your eligibility
Before applying for the loan, check Personal Loan eligibility. Lenders generally emphasise age, employment status, monthly income, credit score, and more for deciding if you are applicable for the loan. Lenders also have eligibility calculators in place that helps you understand the exact loan amount you are eligible for. As such, use the EMI calculator for Personal Loan as well after the eligibility calculator for better clarity of your finances.

Enter the principal amount
Once calculated the eligibility, start using the EMI calculator Personal Loan. This includes three different tabs, the first one being the principal amount. You should add the loan amount you are eligible for as calculated in the Personal Loan eligibility calculator in the principal amount tab.

Compare and add interest rates
The second tab is the Personal Loan interest rates section. Here, you add an appropriate interest rate that you can afford to pay. Check the minimum lending rate and add the figures that match or are higher than that. You might not necessarily qualify for the lowest rate, so remember that.

Input preferred tenure
Personal Loans usually come with a tenure ranging between three to five years. You must decide the term before applying for the loan and add that figure in the EMI calculator in months.

Submit for calculations
Once you have added all the figures in the fields of the Personal Loan calculator, click on submit for getting the exact EMI amount payable. The instrument instantly computes the precise amount.

Things to consider while using the EMI calculator

• Your credit score plays an essential role in deciding the loan amount you are eligible for.
• For receiving accurate results, use the calculator available on the lender’s portal instead of the general calculator.
• Remember to factor in the processing fees and other associated charges while adding the principal amount.
• If you find the EMI amount is unaffordable, you can reset and try different permutations and combinations by adding other lender’s figures.

Availing of a Personal Loan is a cakewalk nowadays. You can apply for them for various reasons and repay them in pocket-friendly EMIs. The Personal Loan EMI calculator assists in the loan procuring procedure.