Online EMI Calculator
What is a Personal Loan EMI Calculator?
With the personal loans easily available in the market at a very affordable interest rate, flexible tenure and no end-use verification, it is very tempting to think of availing of a personal loan at the drop of a hat. But have you realised that getting into a debt trap without assessing your eligibility can put you through high financial stress? There will be continuous EMI missouts, and your credit score will dip to such an extent that it will negate all your chances of getting a loan in the future when you need it the most. So it is essential to calculate the EMI using the online personal loan EMI calculator so that the borrowings will be within your reach.
Personal loan EMI Calculator excel is a simple online tool that makes EMI calculation very easy and fast. The results obtained using the personal loan EMI calculator online is 100% accurate. All you need is the loan amount, tenure, and interest rate, and you can get the result in minutes. Knowing the EMI will help you plan your budget so that the EMIs are paid systematically without fail either on or before the due date.
What is EMI?
EMI, i.e., Equated Monthly Instalment, is a fixed amount that has to be paid monthly throughout the tenure of the loan. It consists of the interest and the principal component. The EMI usually remains constant throughout the tenure. If availed at a floating rate of interest, the EMI will change with the periodical interest fluctuations. If the loan is availed at a fixed rate, the EMI will remain constant throughout the loan tenure unless prepayments are made. With every prepayment, there will be an option to either lower the EMI or lower the tenure. Lowering the tenure will be a better option, and it will serve the purpose of making the loan more economical by reducing the overall cost of the loan. Calculation of the EMI using a personal loan EMI calculator is advised so that you can make an informed decision about the loan amount.
How to calculate EMI for personal loans?
A personal loan EMI calculator enables you to calculate the EMI by entering the loan amount, tenure and rate of interest. Being aware of your repeated monthly commitment for the opted tenure helps you balance the monthly budget. The mathematical formula for calculating the EMI is P x R x (1+R)^N / [(1+R)^N-1]. Here
P is the principal
R is the rate of interest
N is the tenure
Manual calculation using the formula can be cumbersome and prone to errors. Whereas with a personal loan EMI calculator, the calculation becomes easy and with 100% accuracy.
The main factors that decide monthly EMI are the rate of interest and tenure. If you have a good income, a high credit score and working for a reputed organisation and have just started your career, you can negotiate with the lender for a better interest rate. Also, with the personal loan EMI calculator excel, you can compare the EMIs of different financial institutions and choose the deal that is best for you.
How to Use the Sharda Finance Personal Loan EMI Calculator?
Planning your finances wisely spares you from financial stress. Personal loans are easy to avail, and if you have a good income and a good credit score, it makes it much easier. With most of the banks providing the facility of pre-approved loans to select customers, access to personal loans has become much easier. The moment you decide to avail of a personal loan, all you have to do is check your eligibility by accessing your net banking account and placing a request. The amount will land in your account within seconds. Being impulsive while opting for a personal loan is not a prudent thing to do. Before applying for a personal loan, it is wise to assess the repayment capacity vis-a-vis your income. This is where the requirement for a personal loan EMI calculator comes in.
Sharda Finance Personal Loan EMI Calculator is a simple tool that enables a seamless calculation of the EMI. You can use the EMI calculator multiple times by changing the loan amount, tenure, and rate of interest. The process of using the Sharda Finance personal EMI calculator is given below:
- Go to the ‘Financial Tools’ option on the website of Sharda Finance
- Enter the three components, i.e., the loan amount, tenure, and interest rate, by dragging the tab on the slider.
- The EMI will be calculated and displayed immediately.
- The interest payable for the tenure opted, and the total loan amount payable by the end of the tenure will also be displayed.
- An amortisation schedule, a chart that gives a break up of the interest and the principal payout out of the EMI each month till the end of the tenure, will also be provided.
How To Reduce The Personal Loan EMI?
The only yardstick to make decisions about a personal loan is not by considering how easily the loan is available. Just because personal loans are available easily, you should not borrow erratically. Being smart in your choices will help you lead a life devoid of financial stress. Else, you will end up paying EMIs all through your life. There are various ways to reduce the Personal Loan EMI.
- Borrow only if required: Though personal loans are easily available and your eligibility is high, you should debate over the amount that is actually required and borrow only to that extent. Otherwise, you will unnecessarily end up in financial distress in the future. The EMI may seem affordable in the beginning as the EMI depends on the loan amount. But as your monetary responsibilities increase and your income remains unchanged, it may become difficult for you to repay the loan promptly. To keep the EMI in proportion to your pocket, you should borrow only to the extent required.
- Do market research and go for the best deal: The other factor that the EMI depends on is the rate of interest. There are several players in the market offering personal loans at a competitive interest rate. Compare the prevailing rates and the corresponding EMI for the loan amount desired and go for the best deal. You can use the personal loan EMI calculator excel in making the comparison.
- Opt for a longer tenure: Loan tenure also plays an essential role in deciding the EMI. If you are young and have years of service left, you can opt for a longer tenure to reduce the personal loan EMI. If your monetary status permits, you can make prepayments to reduce the tenure and clear the loan before maturity.
- Ensure prompt repayments: EMI missouts are the biggest hassle in the loan journey. The EMI concept was introduced to makes the loan repayments convenient by paying a fixed amount every month. If the repayment becomes cumulative due to EMI missouts, the repayment of the loan will become stressful. In addition, you will have to bear an additional cost by way of penalty on the missout of EMIs. Another repercussion will be the deterioration of the credit score, which will impact your future loan applications. To prevent all this, you should ensure prompt repayments of the loan.
- Decipher the fine print: You should make it a point to go through the fine print in the terms and conditions to understand if there are hidden and additional charges apart from the interest like the processing fee, foreclosure charges, late payment fee etc. These charges may come as a surprise and would increase the EMI payout.
- Yearly EMI revision: Many lenders offer the option to revise the EMI every year according to your income up-gradation. By doing so, you will be able to pay the loan much before maturity, which will lower the overall cost of the loan.
- Make prepayments whenever possible: Make periodical prepayments apart from the regular EMI, which will reduce the loan’s tenure and thus decrease the interest cost on loan.
- Consolidate your debts: If there are several loans and you have several EMIs to pay, you can be rid of the EMI hassle by consolidating all the debts. You avail of a personal loan and clear all the smaller loans so that you will be spared from remembering the due dates of several EMIs. This will enable you to make the repayments promptly and maintain a good credit score.
- Be aware of the EMI in advance: Calculating the EMI using the online personal loan EMI calculator before applying for the loan will restrict your borrowings to your affordable budget. This will enable prompt repayment of the loan.
Factors Affecting Personal Loan EMI
The main factors affecting the Personal Loan EMI are the following.
- Loan amount: The loan amount has a direct impact on the personal loan EMI. The higher the loan amount, the higher will be the EMI.
- Tenure: If the tenure is longer, the EMI will be lower, and if the tenure is lower, the EMI will be higher.
- Rate of Interest: The rate of interest affects the personal loan EMI majorly. The higher the EMI, the higher will be the EMI and the overall cost of the loan.
The method of interest calculation also impacts the personal loan EMI. If flat rate interest is applied, then the interest will be applied on the original sanctioned amount throughout the tenure of the loan. So the loan installment will remain unchanged. Whereas, if the interest calculation is on the reducing balance, then the apportionment of the EMI amount towards the principal will increase during the later part of the tenure. If prepayments are made, the principal will reduce to that extent, and the interest component will also decrease. In such cases, there is an option to change the EMI to reduce the loan tenure so that the loan closes within the maturity period.
So you can use the online personal loan EMI calculator to calculate the EMI various times by changing the value of the components till you arrive at the EMI that fits your pocket.
How is personal loan interest calculated?
When the banks/NBFCs are marketing their loan products by highlighting the interest rates offered, they will be referring to annualized interest rates. That means the interest rates mentioned will be the rate charged for a year. There are no uniform interest rates across all the financial institutions. It is essential to understand how this annual rate converts into monthly EMI. The personal loan EMI calculators help in converting this annual rate into a monthly rate to arrive at the EMI.
The conversion is done automatically by the personal loan EMI calculator. To manually convert the annual rate into a monthly rate, the annual rate has to be divided by 12. For instance, if the interest rate calculated for the loan amount is 6.75%, the monthly rate will be 0.56%.
What is a loan amortization schedule?
It should be primarily understood that the EMI collected for a loan will be adjusted towards the principal as well as the interest. The amortization schedule is nothing but a chart that gives a clear picture of the break up of the EMI towards the principal as well as the interest for the entire tenure chosen. You can also observe that since the principal will be a huge chunk initially, the adjustment towards the interest portion will be higher during the initial years and will start reducing towards the later part of the tenure. The amortization schedule will give you an insight into the stage at which the prepayment towards the loan will fetch you the maximum advantage.
Personal Loan EMI Calculator FAQs
EMI calculator with excel sheet is equally accurate as the calculation done with the Personal Loan EMI calculator. But the advantage of the calculation with the personal loan EMI calculator is the speed with accuracy.
The formula applied for the EMI calculation by the bank and the EMI calculator is the same. You should make sure that the value of the components, i.e., loan tenure, rate of interest and the loan amount considered by the bank and the calculator, are the same. Not to forget to include the professional fees in the loan amount to calculate the EMI. If this is done, then the EMI given by the bank and the EMI arrived at by the calculator will be the same.
Arriving at the EMI before applying for a loan will help you make an informed decision.
The prepayments made to the personal loan will reduce the principal to that extent. Since the interest application is on the reducing balance, the cost of the loan will reduce with prepayments.
Personal loan EMI calculators will help you do the calculations multiple times by reducing the value of the components till you reach a deal that translates into the most economical EMI