What Is EMI And How To Calculate EMI On Your Personal Loan?
EMI payments have grown more popular over the past few years since they are the most convenient form of payment, be it for students, salaried employees, self-employed individuals and even retired individuals. Here’s all you need to know about EMI calculators for Personal Loans.
EMI stands for Equated Monthly Instalments of cash that you make over a period of time to a particular lender or provider of goods or services. EMI payments are made until your monthly instalments collectively match the amount of money borrowed or the monetary price of the products or services purchased.
EMI payments have grown considerably in popularity since they are the most convenient form of payment, enabling consumers to purchase something they need outright, without needing to collect sufficient funds for an outright purchase. EMI payments have also emerged as the preferred way to repay loans, especially Personal Loans. Before borrowing a loan, the borrower has the ability to speculate and forecast the EMI payment using an EMI loan calculator. Various EMI calculators have made this calculation and simple over time.
Benefits and Implications of EMI Calculators
The internet has made the calculations of payable EMI seamlessly fast and convenient. EMI calculators for Personal Loans give you a clear picture of your monthly payments once you input the principal loan amount, rate of interest and the total time period of the loan. A Personal Loan EMI calculator is the best way of being prepared regarding your instalments and your monthly expenditure.
- It helps you make sure that you will be able to undertake the responsibility of EMI repayment without any stress on your monthly budget.
- In case the EMI amount is too high, an EMI calculator will also help you either decide to reduce your loan principal amount or choose another lender who offers a lower rate of interest.
- You may also decide to increase your tenure thus making it easier to repay a smaller amount over a longer period of time.
In the absence of a Personal Loan EMI calculators, which was common especially over a decade ago, you can always calculate your EMI manually. Borrowers have long used excel formulae and other mathematical formulae to calculate EMI. Here is a look calculating EMI online:
Online Loan EMI calculator
Most lenders have websites that feature convenient Personal Loan EMI calculators. These calculators perform all the mathematical calculations and show you the EMI depending on principal, interest rates and tenure, all of which may be adjusted according to your needs. The EMI calculator works on the primary formula of EMI = [P x I x (1+I)^N]/[(1+I)^N-1], where P is the Principal, I is the monthly rate of interest and N is the number of instalments.
If you’re not a fan of mathematics, you can ignore the formula and simply use the online EMI calculator using these steps:
- Enter your chosen loan amount in lakhs; this is your principal
- Next, enter your tenure; this is the period in which you plan on repaying your Personal Loan
- Lastly, enter your interest rate
- You will immediately see your EMI amount, which contains both your principal amount and your interest amount divided across the tenure
Likely Reasons for Fluctuations in EMI
Certain lenders offer a provision of progressing EMI payments. This means that the EMI payment increases over the years, to reduce the tenure, hence causing fluctuation in the EMI payments over time. Premature repayment of the loan amount amidst the tenure will cause the principal to change and hence the newer EMI will be based on the new interest rate constructed by the prepaid principal. The causes for fluctuations and changes in EMI payments can be closely affected by the interest rate. For instance, floating interest rate or new interest rates by the lender will result in a change in your EMIs. Select a loan with a fixed interest rate or a floating interest rate that suits your needs and of course, make sure your interest is the lowest possible. It is also important to pick a lender based on trust and services offered.
Are you on a lookout for a convenient Personal Loan to fund an immediate need? Be it a medical emergency, a wedding in the family, home renovation or even travel needs, a Personal Loan with easy EMI repayment can give you access to funds quickly and conveniently. Apply for a Personal Loan online at Bajaj Finserv, and enjoy instant loan approval, funds in your account in 72 hours or less and loans up to Rs.25 lakh.