How is the EMI calculated in a personal loan from bank?
A personal loan can come in handy in times of need—it is one of the easiest loans to avail. It is an unsecured loan—meaning no collateral or guarantor is required to avail the loan. Banks and NBFC’s require less documentation, but you pay for this with relatively high interest rates—again because the loan is unsecured, meaning the lender does not have any safeguard against customer defaulter.
What is EMI?
EMI stands for Equated Monthly Installment. It is the fixed amount of money you need to pay every month to your lender, towards paying off your entire loan—interest included.
Your EMI consists of two important components:
• Repayment towards the principal amount borrowed and
• Repayment towards interest
The amount of EMI every month is calculated after taking into the account the loan period.
How do I calculate my EMI?
Using an online personal loan EMI calculator is straightforward and simple. It is quick, error-free and gives you instant results. All you need to do is to input the
• loan amount
• the interest rate and
• the tenure of the loan
You will get the resultant monthly EMIs. You can also see the a) total amount of interest you need to pay towards servicing your loan during the entire loan tenure and b) the total amount you need to pay (principal + interest) towards your loan.
Your personal loan EMI can easily be calculated by using an online EMI calculator. You can use a personal loan EMI calculator before availing a personal loan, so that you know your monthly EMI outflow and plan your finances accordingly.
You can also use a personal loan EMI calculator before approaching the lender so that you can compare various loan offers in the market before making a final decision.
Make sure you trust only credible online resources that let you instantly calculate the EMI amount on your personal loan.
What are the criteria for getting a personal loan?
The pre-requisite to getting a personal loan without any hassles is having a healthy credit history and a solid credit score. Additionally, lenders will look at your employment stability and income. Your relationship with the lender is also taken into account while sanctioning the loan. You may be eligible for certain pre-approved offers.
The end use of the loan could be anything—from servicing your existing loan obligations, to cash for funding your dream vacation, purchase of consumer durables, cash for business purposes or for any other emergency purposes—say a medical emergency or the loss of a job. Whatever the need be, make sure that you are aware of the monthly EMI obligations so that you have your finances planned seamlessly.