If you have a financial requirement to be met, you turn to the bank and apply for a Personal Loan. Personal Loans are amazing, and you can avail of a massive amount to meet any requirement without any restrictions. It has simple eligibility criteria and involves minimal documentation. You can apply for the Loan offline or online. On approval, the Loan amount gets credited to your Bank Account in the shortest possible time.
Personal Loans are considered an affordable financing option. You can apply for the Loan at an attractive interest rate and repay it in equated monthly instalments. You need to calculate the EMI payable before entering into a Loan agreement. It helps you grasp your affordability and helps with financial planning. Let us understand how to calculate your Personal Loan EMIs, both manually and using a Loan calculator.
Formula to calculate Loan EMI amount
Use the following formula to calculate the Loan EMI amount:
EMI = [ P X R (1 + R) ^N] / [ (1 + R) ^ (N -1)]
- EMI = Equated Monthly Instalment
- P = Principal Loan amount
- R = Interest rate
- N = Tenue
To determine the online Loan EMI, you need to add values in the formula and calculate.
Using the Personal Loan calculator
Looking at the mentioned formula may give you chills and may find the calculations complex. If you do not prefer calculating your EMI manually, the Personal Loan calculator comes to your rescue. It is an online tool that determines the approximate EMI payable in no time. The online tool is readily accessible on any leading bank’s website. Only enter the key Loan variables like the principal Loan amount, interest rates, and tenure, and you are good to go.
On hitting the calculate button you get accurate results instantly. The Loan calculator saves the time and trouble of doing manual calculations. Plus, with manual calculations, you cannot be assured of obtaining accurate results. Typically, you can rely on the results from the online calculator. Another plus point of online calculators is it allows you to consider various scenarios.
For instance, if the derived EMI amount is beyond your budget, you can consider adjusting the principal amount or tenure. Alternatively, if you think you can afford to pay a higher EMI amount, you can increase your principal amount or reduce the tenure entered in the tool and see the impact it has on the EMI payable. The calculator helps select the right Loan variables and plan its repayment.
Neha Sharma, a finance student, loves to write in her free time. She has spent a considerable time researching on Loan calculator. Through her work, she explains how it helps decide the EMI amount