Personal loans have revolutionised our lives by offering convenience and flexibility. They help tackle medical emergencies, plan dream vacations, and renovate homes. Furthermore, personal loans are unsecured, meaning you don’t have to put your assets on the line. However, one concern that worries many borrowers is the repayment of personal loan EMIs. Paying all your loan EMIs on time is crucial to avoid damaging your credit score and potential trouble.
To prevent such a situation, you can utilise a personal loan EMI calculator. Follow the tips mentioned below to use the EMI calculator wisely and properly plan your personal loan EMI repayments.
What Information is Needed to Calculate EMI?
Using a personal loan EMI calculator is important to calculate your outgo for different loan options. This involves knowing the exact loan amount you need, the loan tenure you are comfortable with, and the monthly EMIs you can afford to pay. To use a personal loan EMI calculator, you first need to compile the following details:
- Principal loan amount
- Applicable interest rate
- Loan repayment tenure
Enter these details in a personal loan EMI calculator to obtain the EMI you can comfortably pay. In fact, the personal loan EMI calculator also allows you to adjust the information. So, you can keep modifying it until you find the desired repayment amount with a suitable repayment period.
With a personal loan EMI calculator, you can find the best option for your specific needs. Overall, the EMI calculator can help you plan your advance payments or pre-payments effectively.
How to Use a Personal Loan EMI Calculator?
This tool is readily available online and is quite easy to use. You only need to follow a few steps to calculate the monthly EMIs.
Step 1: Choose a personal loan EMI calculator from the website of a reputable digital lender.
Step 2: Enter the desired loan amount.
Step 3: Add the interest rate offered by the lender.
Step 4: Select the repayment term in the ‘loan tenure’ section.
Step 5: Click on the ‘calculate’ option.
Step 6: Finally, you will obtain the EMI amount based on the details you have provided.
What are the Additional Benefits of Using a Personal Loan EMI Calculator?
In addition to assisting with loan repayment schedules, a personal loan EMI calculator offers several other advantages. Let us take a look at them individually:
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Accurate Results
Manual calculations of loan repayments can lead to errors. A calculator can perform the same calculations in seconds, saving hours of manual effort. Moreover, a personal loan EMI calculator ensures the most precise results.
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Easily Available
Finding a personal loan EMI calculator is relatively simple. Just go online and search for “personal loan EMI calculator.” The search results will show calculators available on the websites of well-known digital lenders. You can access the calculator from anywhere and at any time. While multiple options are available, choose one with a user-friendly interface, as it is comparatively easy to use.
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Free of Charge
The best feature of a personal loan EMI calculator is that it is free of charge. There is no need to pay any hidden fees to access the services. Additionally, you are not required to provide any personal information to utilise it.
Why is it Important to Know the Loan Repayment Schedule?
Now that you understand how to use the online EMI calculator and its benefits. Let us explore how knowing your repayment schedule can benefit you.
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Determine a Budget Accordingly
Knowing the duration of your loan allows you to create a monthly budget that ensures timely payment of EMIs. This enables you to plan for other expenses and avoid missing due dates. By managing your finances in a proper manner, you can live comfortably while also reducing unnecessary spending.
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Manage Your Credit Score
Keeping track of the due dates and amounts owed helps you avoid defaulting on loan payments. Defaulting can have a harmful impact on your credit score, so it is crucial to maintain a strong financial record. A good credit profile and a high score can significantly benefit individuals seeking loans or planning to avail one in the future.
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Keep Your Credit Utilisation Ratio Low
Awareness of the loan’s repayment period motivates you to refrain from taking any additional debt or using your credit card for high-value purchases. Accumulating too many debts simultaneously can strain your financial health and increase your credit utilisation ratio. Maintaining a less than 30% ratio is crucial for ensuring your finances’ health.
The Ending Note
If you’re thinking of taking out a loan, it’s imperative to think about your financial situation carefully. You should take some time to work out what you can afford to repay and plan ahead. One handy tool to help you do this is a personal loan EMI calculator. This calculator lets you enter the loan amount, interest rate, and repayment tenure, then calculates your monthly instalment payments.
And remember, it’s always important to read and understand the terms and conditions of your lender. This helps you know exactly what you’re getting into and what your obligations will be. By making an informed decision, you can make sure you’re making the best choices for your financial future.
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