A Complete Guide on How to Calculate the EMI on Personal Loans

Are you having difficulties using a personal loan EMI calculator and want to know how to use it? Looking to finance a foreign tour with your family or pay off all your debts at once? Want to go for an immediate personal loan but don’t have enough information regarding it? 

Well, then you have to go to the right place because this article talks about all these things briefly. In this article, you will learn about personal loans, what a personal loan EMI calculator is, and how to use it. 

What is a personal loan? 

Like any other form of loan, a personal loan is a short-term credit service where you borrow money from a bank and in return pay the bank at a little higher interest. This interest is the profit obtained from the interest rate that the banks keep with them. An immediate personal loan is given to individuals who have a good credit history and a clean track record. 

It is an unsecured form of loan that doesn’t require any collateral or security fund. This is the striking feature of a personal loan that differentiates it from other types of loans. 

What are some of the exclusive benefits of a personal loan? 

• The approval time is quite fast for a personal loan, which is a significant advantage. 

• There is little paperwork and it is often carried out within a day, which is another great advantage. 

• Your loan is instantly sanctioned by the banks, especially if you have a good credit score. In such cases, they are sometimes called “immediate personal loans.”

• They have a lower rate of interest, which means it won’t bother you much financially during depositing your instalments. 

• You can get up to 35 lakhs of rupees as your loan amount, and some banks even provide up to 40 lakhs.

• Personal loans are highly flexible, which means their repayment tenure is somewhere between one year and five years. 

• They are easily payable, as banks don’t charge you a high rate of interest. You have to repay in small instalments within a relatively long period. 

Now, what is a personal loan EMI calculator? 

To calculate your EMIs for personal loans, an online, user-friendly, AI-based tool is used. This calculator helps you calculate the interest amount that you are going to pay to your bank. A personal loan EMI calculator requires your interest rate, loan amount, and period and gives you the result within a second. 

What are some of the exclusive benefits of using a personal loan EMI calculator? 

There are many benefits to using a personal loan EMI calculator, and they are:

• It saves you a lot of time by doing all your calculations in less than a second. It takes your number, processes it, and gives you the result in no time. 

• A personal loan EMI calculator gives you the value of your estimated interest. This helps you know how much you are going to pay and for how long. 

• It keeps you updated regarding the loan dynamics, so you should be using it now and then to be updated. 

• A personal loan EMI calculator gives you accurate results because it is calculated by artificial intelligence. 

• It is completely free and available with just one click, which increases your convenience. You can rely on it anytime you need to know the figures. 

What is the best way to calculate your EMI for personal loans? 

There is a standard formula that is used to find your EMI for personal loans, and the formula goes like this, 

   E= P x R x (1+R)^N / [(1+R)^N-1]

Here, E equals the EM

I know that you are going to pay. P is the principal loan amount that you took from the bank. N is your loan tenure, and R is the rate of interest that banks are going to charge. 

To understand this better, let us take an example where you take a loan of $10,00,000 from the bank. Banks charge you a 10% interest rate and give you 15 years to pay that in the form of an EMI. 

So, according to the formula mentioned above, your monthly EMI will be 10,476 rupees. 

But, to avoid such complexity while calculating the EMI manually, you should use a personal loan EMI calculator. It will give you results within a second after you enter the numbers. 

How do I use a personal loan EMI calculator? 

Here are some simple steps to use to calculate your EMI for an immediate personal loan and get your desired results. 

1. Open the application or the site on which you rely to calculate your EMI. To be frank, there are tens of applications on the internet, and you can use any of them. 

2. In the first bar, enter the loan amount that you have taken from the bank. 

3. Now, enter the rate of interest that the bank has charged you for taking this immediate personal loan. 

4. Put in the number of years up to which you have taken the personal loan in the requisite bar. 

5. Now press on the “CALCULATE” option, and you have your result right in front of your screen. 

Wrapping it up

In India, the rate of interest for a personal loan is somewhere between 8.5% and 30%. However, most banks charge between 10% and 20%, which is a decent interest rate. You should use a personal loan EMI calculator to calculate your interest rates and your remaining amount frequently to keep up with the trends. 

You should go and visit the official page of Piramal Finance to know more about personal loans and see their amazing content on topics like this. They have also got engaging content on investments (SIPs, mutual funds, etc.), which you should have a look at.