Usually, personal loans are unsecured loans and are available for both self-employed and salaried borrowers in order to help them to meet their private expenses that are immediate and urgent in nature. As mentioned above that the personal loans are unsecured loans and can be availed quickly without any security. However, the interest rate on personal loans is generally higher than that on secured loans. There are several providers of personal loan in India which offer quick and cheap loans. A personal loan is availed only if:
Benefits of availing a personal loan: –
Some factors that affect Personal loan EMI
Following is an illustration which will provide you with a comparison of EMI for an Rs. 1 lakh loan at different tenures:
|Tenure of the loan||2 years||3 years||5 years|
|EMI amount on loan amount of Rs. 1 lakh at 10.99%||Rupees. 4,660||Rs. 3,273||Rs. 2,174|
|Total amount you will be paying including interest and principal||Rs. 1.24 Lakh||Rs. 1.38 Lakh||Rs. 1.72 Lakh|
|Interest you have to pay over loan tenure||Rs. 24,214||Rs. 38,438||Rs. 71,959|
For a 5-year personal loan at a rate of 10.99%, the EMI is Rs. 2,174 per lakh. A borrower will be required to pay an interest of Rs. 71,959 on his loan amount of Rs. 1 lakh over 5 years. On the contrary, if the borrower wishes to avail a 2-year term loan at the same interest rate, he will have to pay a higher EMI of Rs. 4,660 and total interest of Rs. 24,214, which is much lesser than what you paid for a 5 years loan.
Benefits of EMI Calculator
EMI calculator allows you to calculate your loan EMI and has several benefits, which are listed below-
Saves time: EMI calculator helps the borrower of the personal loan in doing tedious calculations by calculating EMI in just seconds, as the potential borrower will get the output immediately as the moment he enters the required details.
Provides accurate results: Online EMI Calculator will provide the borrower with accurate results, as wrong EMI calculations may lead to change the decision of the borrower while taking a loan. Therefore, it is better to use online EMI calculator to get accurate results.
Allows to evaluate multiple schedules: EMI calculator allows the borrower to view the amortisation schedules and EMIs for multiple combinations of interest rates and loan tenures, thus allowing the borrower to choose the EMIs that suits his repayment or servicing capabilities.
Personal Loan EMI Calculator Formula
Apart from the online EMI calculator, the borrower can also calculate his monthly EMI with the use of a mathematical formula. The formula to calculate loan EMI is given below-
P*r* (1+r) ^n/([(1+r) ^n]-1)
In the given formula, ‘P’ is the borrowed amount of loan
‘r; is the interest rate per month
‘n’ is the tenure of the personal loan in months