Personal Loan Prepayment Calculator Benefits and Steps to Use

The value of EMI is fixed at the time of buying. It is paid every month. This is to ease the burden on the borrower. You can, however, pay off loans ahead of schedule. This is a prepayment of loans. We can also call it “payment in advance.” People use this to pay on time. It can be useful in many ways. Its amount can be calculated using a personal loan prepayment calculator. Let’s discuss this in detail.

When people pay EMI, they pay interest. There is a fixed interest to be paid. It has to give every month with EMI. But sometimes, people want to ease the problems. If they have lump sum money, they can use it. It can be used to repay the loan amount. It can reduce the total amount. In turn, it reduces interest. So, the prepayment of loans minimises the burden on people. The amount for prepayment is calculated before paying. It is done by using a personal loan prepayment calculator. It is effortless to use.

Steps To Use A Personal Loan Prepayment Calculator

Using the personal loan prepayment calculator is easy. Follow these simple steps:

1. Enter the principal loan amount.
2. Enter the current rate of interest.
3. Mention the original term of the loan.
4. Verify the number of EMIs paid.
5. You will see the amount that is due.
6. Enter the prepayment amount.
7. Click OK.
8. The screen will display the amount paid.
9. It will also mention the amount left.
10. The period and EMI will change.
11. The new period and EMI will be visible on the screen. In the prepayment of loans, different cases can arise. These includes

Case 1: Full prepayment

This is for the people who want to pay the amount completely. It includes paying every penny left. It is called foreclosure. You can do it if you become eligible to pay the entire amount. It saves you from interest. This method saves a lot of money. But it requires paying a lump sum all at once. A specific amount is paid in this. That amount is called the foreclosure amount.

Case 2: Partial prepayment once

It means paying a partial lump sum at once. It shortens the repayment period by lowering the principal amount. And less interest to be paid. This amount can be calculated using a personal loan prepayment calculator. It is effortless to use. Fill in all the blanks. Get a new loan period and EMI. The EMI can also be varied. This helps people in many ways. It can reduce the burden of EMI as the remaining balance is reduced.

Case 3: Partial monthly prepayment 

It means paying in advance every month. It also reduces the overall period of the loan. This amount can also be calculated using a prepayment calculator. The user can decide the extra amount to be paid. All the values are to be put in the prepayment calculator. A new EMI is generated. It is user-friendly and easy to use. People can use it if they want to increase their monthly repayment. This helps them pay off loans on time.

Above, we discussed three cases regarding repayment. The amount for all three is differently calculated. A personal loan prepayment calculator can easily calculate it. This calculator is beneficial and easy to use. Anyone can easily use it for calculations. The only work to be done is to input the correct values. All analyses are carried out by the calculator. There is no chance of error. Piramal Finance offers ZERO charges on Personal Loan Pre Payment. 

Benefits Of Using A Personal Loan Prepayment Calculator

There are many benefits to using a personal loan prepayment calculator. Some of these are:

1. Easy to Use: This calculator is easy to use. No special knowledge is required. Anyone with little financial knowledge can easily use it. Also, no special work is to be done. The only task at hand is to assign values. Even a kid can operate it. It is readily available online. There is no need for offline work.
2. No Errors: The calculations on this calculator have no errors. Since it is software, there is no chance of error in the calculations. This can make your work easy. It can provide you with error-free results. This can also help with proper planning. This can help people save time. 
3. Lesser Interest: Prepaying loans has a lot of benefits. Reduced interest tops the list. The prepayment of the amount reduces the principal amount. This, in turn, reduces interest. It saves money. Interest is a burden on people. Prepaying loans can reduce it. Interest adds up to increase the principal amount. The amount to be paid back is much more than the loan taken. It is paid in EMI, but it’s still tricky. However, prepaying reduces the burden. A personal loan prepayment calculator can calculate this amount. It also shows detailed values for interest and period. Hence, it is advantageous. 
4. Time Management: The personal loan prepayment calculator can help manage time. Prepaying loans reduces the overall period. This requires planning. You can be free of debt easily. You can calculate the prepayment amount according to your comfort. It is an easy process. It does not require offline work. You can do it yourself. In turn, this saves a lot of time. Also, when you are free from debt early, you can focus on other things.
5. Practical Approach to Life: This can give someone a practical approach to life. A definite amount can motivate you to save money. You can plan for the future. Keeping in mind the occasions, the prepayment amount can be changed. You can make partial prepayments. 

CONCLUSION

Using a personal loan prepayment calculator is very easy. Prepaying your loans also has a lot of benefits. It is easy and friendly. This can reduce the burden on people and help them understand time management.