When facing a financial crisis, young millennials always turn to small-ticket personal loans as a first resort. Personal loans are eagerly sought for daily spending, quick getaways, or a major buy (like an iPhone). They are the best choice for getting hassle-free, quick money.
Your financial needs can be met with a personal loan. For example, a personal loan can be helpful if you need money to support loved ones financially, pay for medical expenses, or organize celebrations. The real kicker is that personal loans are simple to apply for and repay. Equated Monthly Installments, or EMIs, are how you pay back Personal Loans.
You can calculate the EMI amount with a personal loan emi calculator even before applying for the loan. So let’s learn how to do that. Continue reading If you want to learn how to easily calculate EMI on Personal Loan.
Why is a personal loan required?
A personal loan can help you pay for many different types of expenses. You can decide if a personal loan is appropriate for your case if:
- You require money immediately: Money can be made available within a few days.
- You wish to pay off debt (maybe a credit card debt) with a high-interest rate.
- You need money to pay for necessities. Unexpected costs or home remodeling are two more beneficial uses of personal loans.
How to Calculate EMI for Personal Loan?
Now that you have established a reason for taking a personal loan and, presuming you have also decided the loan amount, you must also take into account the EMIs that you would have to pay regularly each month.
Let’s begin by stating the simple manual calculation.
The following formula should be used to calculate personal loan EMIs manually:
EMI = P × r × (1 + r)n/((1 + r)n – 1)
Where
- ‘p’ is the Loan amount,
- ‘r’ is the interest rate,
- ‘n’ is the repayment tenure (in months).
The loan’s EMI is directly related to the loan’s principal and interest rate and is inversely proportional to the length of the loan. As a result, your EMI will increase as the loan amount and interest rate increase. A longer tenure, on the other hand, will result in a lower EMI.
Although you can manually compute the EMI for personal loans, doing so may be prone to error. A quick and accurate way would be using personal loan EMI calculators.
Personal Loan EMI Calculator
Using an online EMI calculator is simple. Just follow the instructions below.
- Enter the required loan amount
- Chose the interest rate
- Enter your loan repayment period
- Click ‘Calculate’
As soon as you submit this data, the EMI calculator will compute the payable EMI amount.
How does the calculator help?
The personal loan EMI calculator lets you know how much money will be paid in equivalent monthly installments (EMIs) to the lender each month until the loan is fully repaid.
When calculating the EMI, the variables are the personal loan amount, term, and interest rate. The calculator will calculate your monthly installment for a personal loan with a certain amount, interest rate, and term.
What it shows
The EMI calculator results will indicate three things:
- The EMI amount is to be paid each month.
- The interest component of each EMI month.
- The amortization plan displays the outstanding balance after each EMI payment.
Perks of a Personal Loan
Personal loans provide many benefits. First, they are a terrific option to pay for your urgent needs, whether an unexpected medical expense or a large purchase.
Let’s look at some of the key benefits of personal loans:
Quick Approval
By quick, we mean within 24 hours!
A personal loan is processed in far less time than a home loan, which can take 3–4 weeks. So, they are your best option when in need of quick cash.
Collateral Not Required
Personal loans are unsecured, so you don’t need to put up any security or collateral to get one. However, the interest rates are typically higher to hedge the losses
Flexibility
A personal loan is not restricted to use for only one thing, unlike car or housing loans. So, for example, you can use them to upgrade your lifestyle and pay for your overbilled credit card (due to a sudden shopping spree).
Minimal Documentation
Only a few primary KYC documents are required for online personal loan processing. Paperless documentation makes the process easy and quick.
Conclusion
If you need urgent cash, personal loans are a desirable choice. A good credit rating makes you eligible for the lowest interest rates. In conclusion, applying for a best personal loan online only takes a few minutes. Begin your application process online today with the help of a personal loan emi calculator!
