Today, personal loans have become quite popular and easily accessible. Most banks have started offering online personal loans through their apps and websites, simplifying the process of applying for loans. Moreover, individuals can use the funds from personal loans for a variety of reasons, such as home renovations, purchasing items, medical emergencies, or paying off existing debt.
However, before taking any loan, it is important to understand the short-term and long-term financial implications of it. Using an online Equated Monthly Instalment (EMI) calculator can help you understand your loan obligation and how much you will need to pay back over time.
What is an EMI calculator?
An EMI calculator is an online tool offered by most bank websites that helps users determine the monthly repayment amount for a loan. The EMI calculator takes into account three key factors: the loan amount, the applicable rate of interest, and the loan tenure.
By inputting these variables into the EMI calculator, you can quickly calculate how much EMI you will need to pay each month for your personal loan.
Key benefits of using an EMI calculator
Here are some of the key benefits of using an EMI calculator to better understand the repayment structure and the interest rate on personal loans:
Financial planning: A personal loan monthly EMI calculator offers a clear picture of your monthly payments, which in turn allows you to plan your budget more effectively. You can assess whether the loan repayment amount fits comfortably within your monthly income and expenses.
Compare lenders: Different banks offer varying interest rates and loan tenures. Using an EMI calculator, you can easily compare these available options by adjusting the variables and seeing how they change your monthly payments. This will allow you to choose the most optimal personal loan offer for your needs.
Loan tenure optimisation: The personal loan EMI calculator can help you understand the trade-off between the loan tenure and the EMI amount. A longer tenure means lower monthly payments but higher overall interest costs. Conversely, a shorter tenure results in higher EMIs but lower total interest. You can experiment with different tenures to find the right balance for your needs.
Avoiding unaffordable loans: The EMI calculator can help provide a reality check on loan affordability. If the EMI for your desired loan amount is too high, you can adjust your loan amount or explore alternative financing options before committing to a loan that you will not be able to repay.
If you are looking to take on an affordable personal loan, you can consider the IndusInd Bank Instant Personal Loan. Some of the key highlights of this loan option include:
- Apply for a personal loan online and get instant approval with video KYC
- Competitive interest rates and flexible repayment tenures
- Loan amount between ₹30,000 and ₹5 lakh
- Easily manage your loan and EMI payments with the IndusInd Bank’s easy-to-use mobile app
Make sure to use the personal loan EMI calculator on the IndusInd Bank website to understand your repayment tenure and EMI amount
To conclude
An EMI calculator is an invaluable tool for anyone considering a personal loan. It helps you understand your loan repayment options, the interest charged, and the total amount due. With this information, you can make an informed decision on the loan amount to borrow and choose a repayment tenure that minimises interest while keeping the payments affordable.