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Optimize your loan for better financial management with a personal loan EMI calculator

Optimize your loan for better financial management with a personal loan EMI calculator

Financial planning is essential to manage monthly payables efficiently, whether it is for paying utility bills, rent, or other investments. The responsibility intensifies when individuals need additional funds to cover personal expenses and take out the money from unsecured financing such as a personal loan. 

Here, individuals must focus on monthly loan payments, i.e., EMI payments. Here, using a personal loan EMI calculator can help borrowers significantly. Read on to know the benefits of using EMI calculators.

Ways to optimize your loan using a personal loan EMI calculator

Personal loans are unsecured financing where borrowers can use the money for various purposes without any end-use restrictions. Due to its unsecured nature, individuals can get funds without pledging any asset and utilize them per their requirements. 

Besides knowing the personal loan meaning, individuals must know the different tools available for such financial products and how these tools can benefit borrowers. A personal loan EMI calculator is one such tool that helps individuals in many ways, including-

●      To understand monthly outgo 

Managing loans not only means reducing debt but managing them to maximize benefits. However, managing them becomes troublesome when individuals deal with multiple EMIs or credit bills. Too many payments can also lead to errors and events like missed payments, resulting in hefty penalties. 

Here, one can use a personal loan for debt consolidation. A personal loan enables borrowers to repay dues in full by making a single payment each month. A personal loan EMI calculator can help borrowers get a detailed breakup of EMI, assess monthly outflow and plan strategically.

Remember, a personal loan EMI calculator allows individuals to access the amortization schedule. An amortization schedule is a complete table of periodic loan payments and shows the amount of principal and interest that comprise each payment till the end term. 

This type of information aids individuals in preparing a monthly financial budget while opting for a partial pre-payment. The personal loan EMI calculator and easy access to these data enable individuals to decide the best time to pre-pay and save on personal loan interest.

●       To settle for the best rates

Personal loan interest rates decide the total cost of borrowing. Interest rates on the higher side will automatically increase the cost of borrowing and vice versa. Even a slight change or difference in interest rates can significantly impact the total loan amount. Hence, individuals can use a personal loan EMI calculator or interest rate calculator to compute the EMIs payable. Loan amount and tenor are also required to calculate EMI. The outcomes from these calculators can help manage your loan EMI repayment efficiently. 

Here, individuals must know that these interest rates vary from one lender to another. Hence, borrowers must conduct market research to settle for the best deal. Leading financial institutions offer high-value personal loans at competitive interest rates.

Further, financial institutions like Bajaj Finserv also extend pre-approved offers to streamline the loan application process. These offers are also applicable to many financial products, including personal loans, credit cards, business loans, etc. Individuals can check their pre-approved offers by entering their names and contact details.  

Thus, by knowing monthly payables in EMI and the amount that adds as interest, individuals can try various combinations of loan amount and tenor and choose the one that suits them best.  

●       To set a suitable tenor.

Tenor plays a crucial role in deciding the EMI amount. If individuals opt for a shorter tenor, they have to pay a high EMI amount and vice versa. Here, individuals must understand that a shorter tenor may lead to higher EMIs but significantly reduce the total interest outgo. 

For instance, if an individual takes a personal loan of Rs.2 lakh at 13% for 2 years, they have to pay Rs.9508 as EMI, and the total interest will be Rs.28,201. If they increase the tenor to 3 years, they have to pay Rs.6,739 as EMI, and the total interest will be Rs.42,596. 

By using an online personal loan calculator, individuals can easily find the right personal loan tenor that works for them. This type of tool has three components, namely, loan amount, tenor, and interest rate. 

Individuals can try different combinations by adjusting the tenor and choosing an EMI that seems convenient. 

Process to use a personal loan EMI calculator 

To calculate the monthly payable, individuals have to follow the steps mentioned below:

Step 1 – Enter the loan amount in the relevant box.

Step 2 – Put the interest rate value similarly.

Step 3 – At last, enter repayment tenor after converting into months, meaning for 2 years or 4 years of tenor, one has to enter 24 months or 36 months in the relevant boxes. 

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Results will immediately appear on the screen. 

Note: Individuals can put values in the respective fields or adjust the slider to set the amount or rates.

A personal loan calculator online helps borrowers get a clear picture of their repayment schedules beforehand, which aids in efficient loan management and the planning of monthly finances accordingly. 

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