In this high-budget world, not everyone is born a millionaire. Unless we have a never-ending source of income, we need to care about our expenses. But along with the money limitations, certain things must be done. For example, if you have any children in the house, you need to get her/his wedding done, and it will cost some money as well.
So, how will you get access to these? The most frequent answer to this question you will get today is that you should go for a personal loan. For people who are not familiar with the term personal loan; It is a kind of unsecured loan given by banks and other institutions to meet your personal requirements. With personal loans, you can do a lot of things such as manage wedding expenses, travel fees, medical expenses, and other legal things. In return, you can pay the bank its money back in small parts within a certain period. These small parts is called EMI.
This intuition has made things much better for people in the past few years. But like all the other things in the world, it also has a negative side. The major issue that people are facing with personal loans is that they have to pay extra money to the lender banks or institutions in the form of EMI (equated monthly installment). And due to the incomplete knowledge and awareness among people, some banks and institutions charge way more than required just for the sake of their benefit. This makes things quite worse for needy people.
But after the introduction of the personal loan EMI calculator, things have been much better. How? Read the complete article and know.
What is an EMI Calculator?
When you take a personal loan, the lender charges you a fixed rate of interest. These rates can be in per annum or in per month. While paying back the money in EMIs, you will pay the principal amount taken as a loan and the accrued amount of the loan i.e. interest.
A personal loan EMI calculator is a free tool that evaluates how much you need to pay extra at the end of your loan tenure. It calculates your total payable amount and then lets you know how much you need to pay on every deadline, say every month. Using an EMI calculator is very easy and one of the smartest ways to evaluate your expenses while getting a personal loan.
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How Does a Personal Loan EMI Calculator work?
A personal loan EMI calculator works on a certain formula that depends on three main factors;
- Loan amount
- Tenure, and
- Interest rates
These parameters often vary from lender to lender and there is no certain limit for that. Due to this, it becomes very important to have proper research of these things before applying for a personal loan from any bank or institution.
To evaluate your total payable amount and the EMI for your personal loan using an EMI calculator, you just need to enter the above-mentioned three parameters in the tool. Once you have entered the principal amount, loan tenure, and interest rate, the tool will process the formulae and will show you the total amount you need to pay along with the EMI.
How to Calculate Personal Loan EMI Using Mathematical Formulae?
You should not always be dependent on tools, that’s what I think personally. Here, I will guide you on how you can calculate your personal loan EMI on your own using some simple mathematical formulae.
All you need to do is follow the given below formula;
In this formula;
- EMI stands for equated monthly installments
- P stands for the principal amount taken
- r stands for the interest rate charged, and
- n stands for the loan tenure given by the loan provider to return the money (it must be in months).
- r is rate of interest calculated on monthly basis. (i.e., r = (Rate of Annual interest/12)/100.
If rate of interest is 15% per annum, then r = (15/12)/100=0.0125)
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A personal loan EMI calculator can be very handy if you are planning to apply for a personal loan. Using it, you can get a proper evaluation of the money you will be returning to the bank. It helps you analyze whether or not taking a personal loan from the bank will benefit you.
You can use our uniquely designed yet simple to use EMI calculator to calculate your EMI and total payable amount within seconds.