Here’s how you can calculate your personal loan interest rate using an online personal loan interest calculator!
Being aware of your personal loan EMI beforehand can allow you to repay your personal loan on time without any defaults as well as meet your needs for your crucial financial goals. To easily compute your personal loan EMI and overall interest outgo, you must use an online personal loan EMI calculator. Such calculators are available easily on most lenders’ websites.
Understanding the crucial aspects linked with an online personal loan calculator
A personal loan is a highly availed credit product in the Indian lending industry. The unsecured nature of the loan makes it an extremely popular option among many. So, if you are one of those looking to hit on the personal loan apply button, ensure to be familiar with specific aspects before making a final decision.
The primary loan components you as a prospective loan applicant must determine are the EMI and overall interest constituent. Ensure that these two parameters are as per your repayment capacity and budget. You can easily do so, using an online personal loan EMI calculator.
How can you compute the EMI and overall interest on a loan using an EMI calculator?
An online personal loan calculator is one of the prudent ways to etermine your EMI and interest outgo as per your affordability. Besides this, the calculator also is known to offer other benefits. These include –
∙ It permits you to conduct complicated computations in seconds, thus saving you time and effort.
∙ It removes the chances of inaccuracy in computations, which is highly possible in the case of manual computations.
∙ It allows you to plan out your repayment strategy by providing accurate information.
Personal loan EMI formula –
Determining your personal loan EMI and interest constituent requires the use of a particular formula, which is standard throughout all online calculators. The standardised method to compute the personal loan repayment components is –
Formula –
Personal loan EMI = [p X r X (1 + r) ^ n] / [(1 + r) ^ (n – 1)]
Here,
EMI = equated monthly instalment
p = principal component
r = personal loan interest rate
n = repayment tenure
This personal loan computation formula is used to compute the personal loan EMI and overall interest constituent.
For instance, suppose Mrs Y, as per her personal loan eligibility, is offered loan proceeds of Rs 10 lakh for a repayment tenure of 3 years at a personal loan rate of 11% per annum. Now, she has 2 routes to compute the EMI and overall interest outgo – through the manual mode and through the online mode. If she chooses the manual mode, then she will take a lot of time and the chances of manual errors are even high. On the other hand, if she selects the online mode, then the computation will take place instantly in seconds with zero manual errors.
To compute the EMI and overall interest constituent, she just needs to input the principal, offered personal loan rate, and preferred repayment tenure on the online personal loan EMI calculator. Once she inserts these three figures, the calculator will instantly compute the EMI i.e., Rs 32,739 and overall interest cost i.e., Rs 1,78,594.
In the case, she is satisfied with the final loan constituents, then she may go ahead with the loan. However, if she is not with the overall interest cost, then she may consider making changes to any of the added values in the calculator to derive a satisfactory outcome. Basis this outcome, she can negotiate with the lender for the same offer.
Ending note
An online personal loan EMI calculator is very simple to use and highly recommended because of its accurate computation. So, before you opt for a personal loan deal, ensure to compute the EMI and interest outgo on a personal loan as per your affordability. Doing so would allow you to timely repay your personal loan EMIs in full, which would keep you away from defaults and help improve your credit score. A higher credit score would further allow you to be eligible for other loan deals in the future.
