How a Personal Loan EMI Calculator Makes Financial Planning Simple 

Guest post from India by Tanvi Kaushik. For those unfamiliar, an Equated Monthly Instalment – ‘EMI’ – Calculator is a set monthly payment provided by a borrower to a creditor on a set day, each month. EMIs apply to both interest and principal each month, and the loan is paid off in full over some years – Ed. 

An unsecured personal loan offers a perfect solution to your financial crisis. You can use these collateral-free credit products for various purposes without any restrictions. However, like every other credit product and loan, even a personal loan comes with an interest rate. Hence, evaluating your financial situation before applying for one is essential. A personal loan EMI calculator is the perfect tool to help you manage your financial planning! Explore all the ways in which this online tool makes financial planning easier for you. 

1 – Gives Quick and Accurate Results 

Manually calculating is a tedious task, and not to forget, it can be prone to errors. In contrast, an online personal loan EMI calculator leaves no room for mistakes as the EMI formulas are fed into its algorithm. So, every time you use it to calculate your EMI, the results will always be accurate and extremely quick! Apart from this, the tool is easy to use as you have to add your principal loan amount, with the loan tenure and interest rate, and it will calculate the EMI for you. Since you get results within minutes, your future financial planning becomes quicker because when you understand what amount you’ll spend on your EMIs alone, you can successfully plan your other expenses. 

2 – Offers a Visual Representation of the Due Amount

For some, having a visual image in front of their eyes proves to be a better helping aid in understanding calculations. Since an EMI calculator shows you exactly how much you need to pay each month, it becomes easier for people to understand the expenses, and they can even manage their monthly expenses accordingly. 

3 – Helps Pick the Principal and Tenor

An online EMI calculator allows you to adjust the principal loan amount, interest rate, and tenor as many times as you want to suit your requirement. This means you can play around and adjust the parameters to pick the best loan that fits within your terms and conditions. For example, if you feel like the EMI is too high, you can decrease your loan amount and increase the loan tenure. Remember, the longer the loan tenure lasts, the more interest you would need to pay, increasing your EMI and the total payable amount. So, keep adjusting the values until you feel like you’ll be able to repay the total loan amount conveniently. 

4 – Assists in Picking the Correct Lender

An interest rate will be added to your loan amount that decides the EMI of your credit. However, this factor will differ depending on the multiple lenders. And naturally, when you think of taking out a loan, you will skim through your options because even a difference of 0.5% interest rate can cause a huge difference in your total loan amount. An EMI calculator will help you analyse which loan can fit your requirements by adding the loan amount, tenor, and interest rate into the calculator to help you find the most inexpensive loan. 
 

 5 – Provides a Loan Amortisation Schedule

Every personal loan EMI is decided based on several factors the principal loan amount, interest rate, and loan tenure. And to plan out your other financial expenses, you need to understand this breakdown completely. A loan amortisation schedule will guide you to make better decisions when using an EMI calculator, as it can showcase the complete breakdown of your personal loan. This will help you in advance planning your expenses accordingly. 

Why Do You Need an EMI Calculator?

Whether the loan is for your future education or buying a utility, calculating the cost of your borrowing will make managing the loan easier as you will have an idea of how much funds you are saving and what portion of your salary is going into repaying the loan. One more thing to remember before calculating the EMI of your current loan is that the value of your goal will differ due to changing factors like inflation. This can create a remarkable difference in your total payable amount in the future. And this is why planning is an absolute necessity! 

 
 
Author Bio: Tanvi Kaushik specializes in Content Marketing and works with the Digital Team at KreditBee – India’s fastest personal loan platform where self-employed and salaried professionals can easily avail of personal loans in just a few minutes when in need of quick funds. Tanvi writes to-the-point articles on personal finance and budgeting which are truly appreciated by her readers. She is committed to making money matters easy to understand even for the layman. Her commitment to her work doesn’t stop her from pursuing her hobbies of hiking, trekking and going on adventurous trips.