Personal Loan EMI Calculator: Make Your Monthly Premiums Simple

What is a personal loan?

A personal loan is an unsecured loan used for various personal expenses such as home renovation, medical emergencies, education expenses, weddings, travel, and many other purposes. It is typically unsecured, which means no collateral like a home or car is required, issued by banks, credit unions, and other financial institutions.

The loan amount, interest rate, and tenure period depend on the borrower's creditworthiness, income, and ability to repay the loan. Personal loans generally have a fixed interest rate and a fixed repayment term, meaning that the monthly payments stay the same throughout the life of the loan.

Personal loan is a widely used form of credit in India, with many people turning to personal loans to finance a wide range of expenses such as home renovations, medical emergencies, education, and more.

The personal loan market in India has been growing at a steady pace in recent years, driven by factors such as increasing income levels, rising consumer spending, and easy availability of credit.

" According to a report by Reserve Bank of India, personal loans are the second-largest category of retail loans in India, after housing loans. A report by CRISIL shows that the personal loan market in India is expected to grow at a CAGR of 15-20% over the next five years, reaching INR 5 lakh crore by FY2025. "

Benefits of using a personal loan calculator

A personal loan EMI calculator is a useful tool that can help you understand the financial implications of a personal loan. Some of the benefits of using a personal loan EMI calculator include:

• Easy to use:

Personal loan EMI calculators are easy to use and require only a few inputs such as loan amount, interest rate, and loan tenure to calculate the EMI.

• Accurate:

It uses a mathematical formula that takes into account the loan amount, interest rate, and loan tenure to calculate the EMI, ensuring that the results are accurate.

• Helps with budgeting:

A personal loan EMI calculator can help you understand the monthly payments you will need to make on a personal loan, making it easier for you to budget for the loan.

• Comparison:

We can used a personal loan EMI calculator to compare different loan options and choose the one that best suits our needs.

• Helps in selecting the right loan amount and tenure:

Personal loan EMI calculators can help you understand the impact of different loan amount and loan tenure on the EMI and helps you to select the right loan amount and tenure that you can afford to pay.

• Helps in understanding the overall cost of the loan:

This calculator can also help you understand the total interest and other charges that you will pay over the loan tenure, which can help you to understand the overall cost of the loan.

How much personal loan can I get?

The amount of personal loan you can get will vary depending on factors such as your credit score, income, and outstanding debts.

The lenders approve the loans for amounts ranging from a few thousand rupees to Rs.50,000 or more. It is best to check with different lenders to see what they can offer you and compare the terms and interest rates.

Personal Loan Rate of Interest

The interest rate for a personal loan can vary depending on many factors, including your credit score, income, and the lender you choose. Generally, loan interest rates fall between 5% and 36%. People with good credit can typically qualify for lower interest rates, while those with bad credit may have to pay higher rates.

Wisely compare rates from different lenders to ensure you get the best deal possible. Some lenders may also have fixed or variable interest rates. So, it's always good to read the terms and conditions carefully before accepting a loan.

Personal Loan Eligibility Criteria

To be eligible for a personal loan, most lenders typically require the following:

1. A minimum credit score: A minimum credit score of 600 or higher is required to qualify for a personal loan. Credit score is widely depend on many factors such as how you've maintained your account, previous transaction history, EMI defaults, etc.
2. Proof of income: Lenders require you to provide proof of income, such as pay stubs or tax returns, to determine your ability to repay the loan.
3. A minimum annual income: Lenders will typically require you to have a minimum annual income, usually around Rs.20,000, to qualify for a personal loan.
4. No outstanding debts: Lenders will also look at your outstanding debts to ensure you are not overextending yourself financially.
5. ID proof and address proof: Lenders may require you to provide ID proof and address proof for identity and address verification.

It's worth noting that the above are the general eligibility criteria, and each lender may have different requirements, so it's always good to check with the lender before applying for a personal loan.

How to use a personal loan EMI calculator?

Using a personal loan EMI calculator is a simple process that typically involves the following steps:

1. Visit www.insurancebolo.com/emi-calculator and give the inputs.
2. Enter the loan amount: Enter the amount of money you wish to borrow.
3. Enter the interest rate: Enter the interest rate offered by the lender.
4. Enter the loan tenure: Input the number of months for which you wish to borrow the loan
5. Click on “calculate”: Once you have entered all the required information, click on the “calculate” button to get the EMI.
6. Review the results: The calculator will show you the EMI, the total interest you will pay over the loan tenure, and the total amount you will pay (principal + interest).
7. Compare different options: You can use the EMI calculator to compare different loan options and select the one that best suits your needs.
8. Plan accordingly: Based on the EMI and the overall cost of the loan, you can plan your budget accordingly and make sure you can afford the loan.

How to calculate a personal loan EMIs or premiums?

To calculate the EMI, we must understand three fundamental aspects in a personal loan. These 3 components are:

1. Principal Loan Amount- What is principal amount in loan?: The principle loan amount is the initial amount of money that a borrower borrows from a lender, such as a bank or financial institution. It is the amount of money that the borrower will need to repay to the lender, along with interest and any other charges, over the course of the loan term.

For example, if you borrow Rs.1,00,000, the principal loan amount will be Rs.1,00,000.

2. Interest Rate: The personal loan interest rate is the cost of borrowing money, expressed as a percentage of the principal loan amount. It is the amount that a borrower must pay to a lender in addition to the principal loan amount as compensation for the use of the borrowed money. The interest rate is usually expressed as an annual percentage rate (APR).

For example, if you borrow Rs.10,000 with an interest rate of 10% per year, your interest charges will be Rs.1,000 over the course of the loan. Interest rates can be fixed or variable. Fixed interest rates are locked in for the entire loan period, and variable interest rates may change over time.

3. Tenure Period: The loan tenure period is the length of time over which a borrower will repay the loan, usually measured in months or years. It is the time period between the loan disbursal and the last EMI payment. The loan tenure is an important factor in determining the monthly payments (EMI) for a loan, as it affects the total interest paid over the life of the loan.

Remember, the longer the loan tenure, the lower the monthly payments and the higher the total interest.

A personal loan EMI calculator- EMI calculation using formula

To calculate the EMI (Equated Monthly Installment) on a personal loan, you can use the following mathematical formula:

The mathematical formula to calculate personal loan EMI is: EMI = P x r x (1+r)^n / ((1+r)^n - 1)

Where:

P is the loan amount (principal)

r is the interest rate, expressed as a decimal (e.g. 0.12 for 12%)

n is the loan tenure (in months)

For example, if you take a personal loan of INR 1,00,000 for a tenure of 12 months at an interest rate of 12%, your EMI would be calculated as follows:

EMI = 100,000 x 0.12 x (1+0.12)^12 / ((1+0.12)^12 - 1)

EMI = 11,664

You can always use our online FREE personal loan EMI calculator to calculate your EMI. This calculator takes into account the loan amount, interest rate, and loan tenure to calculate the EMI for you.