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What is a Personal Loan EMI Calculator?
Planning and scheduling your loan repayment in advance is an important step towards repaying your personal loan. It helps you avoid any financial stress and manage your monthly budget better. To schedule your loan repayment, you need to know your EMI amount, which is the fixed monthly payment you must pay to your lender until your personal loan is fully repaid. But how do you calculate your EMI amount for a personal loan? This is where an online personal loan EMI calculator comes in handy.
A personal loan EMI calculator is a tool that helps you calculate your EMI amount for any personal loan in a matter of seconds, regardless of the loan's end use. It lets you quickly compare different personal loan options and plan your monthly budget accordingly.
How to Use Personal Loan EMI Calculator Online?
In order to use Angel One personal loan EMI calculator, you need to visit the page and enter the following inputs:
- Loan amount:Amount of money (or the principal) that you want to borrow or have already borrowed.
- Interest rate:Interest rate charged by the lender/financial institution for the loan.
- Loan tenure: The duration of the loan in months or years.
Immediately to your right, you will be able to view the EMI along with the principal, the total interest to be paid, and the total amount to be repaid.
Suppose you are looking for the right loan to take in order to solve any cash flow issues. In that case, creating a list of all the different types of loans you can take and calculating the EMI amounts and durations for each of them can help you analyse the loan market and choose the best loan possible. The Angel One personal loan EMI calculator will help you quickly form this database in a matter of minutes by giving you the EMIs for various loan amounts, interest rates and durations.
What is the Personal Loan EMI Calculator Formula?
In order to calculate the EMI, the online personal Loan EMI calculator uses a simple formula:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
P = Principal amount
R = Interest rate per month (divide the annual interest rate by 12)
N = Number of monthly instalments (basically loan tenure in months)
Let's understand this by using the personal loan EMI calculator formula. If you take a personal loan of Rs. 1,00,000 from a bank at an interest of 12% per annum for 5 years. Here is how the EMI would be calculated:
P = Rs. 1,00,000
R = (12/100)/12 = 0.01
N = 5*12 = 60
EMI=100,0000.01(1+0.01)^60 / (1+0.01)^60-1
Or, EMI = 2,224.444768/month
Which Factors Affect Personal Loan EMI?
As seen above, changes in the principal, interest rate, and loan tenure affect the EMI amount. These factors, in turn, are affected by the following variables -
- Marginal Cost of Funds Based Lending Rate (MCLR) - It is a benchmark lending rate which is set as the minimum rate at which banks can give out loans to borrowers. Therefore, all loans given by banks are partly derived from the MCLR.
- Credit score - Credit score - You may have a good credit score based on your record of properly managing personal finances and paying certain bills on time. In that case, you may be charged less interest by banks.
- Income level Income level - A higher income level can help you get a larger loan. This increases your EMIs.
The online personal loan EMI calculator is an online tool used to calculate the EMI and interest to be paid to borrow a particular amount, which will be repaid over a particular duration.
You have to simply visit the calculator page and enter the loan amount, the interest rate to be paid and the duration in which you wish to repay the loan. The calculator will automatically tell you the EMI and interest amount in a matter of seconds.
Yes, the personal loan EMI calculator is available for free online on the Angel One website. Anyone can use it anytime they want to.
The minimum tenure of a loan depends on the institution which is giving out the loan. For a large bank, it can be a year, but for more flexible financial institutions, like NBFCs or P2P lending platforms, the tenure can be as low as 3 months.
You can reduce your EMI amount by -
- Choosing a longer loan tenure -This will lower your monthly EMI but increase your total interest payable.
- Choosing a loan with a lower interest rate - This will reduce your monthly EMI and your total interest payable.
- Making a higher down payment - This will reduce your principal amount and hence your monthly EMI and total interest payable.
A person’s eligibility to take a loan depends on the following factors, among others -
- Income - A person with a high income is deemed as a less risky borrower by institutional lenders.
- Credit score - Your credit score is based on your credit history and repayment behaviour. A higher credit score indicates a lower risk of default and hence helps you get a loan, that too with possibly lower interest rate.
- Existing debts - If you have too much debt already, especially when compared to your income, financial institutions feel less safe giving you their money as a loan.