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Personal loans are among the most popular financing options available today. Not only is it easy to get the loan, but you can use it to meet almost any financial requirement. Its popularity can also be attributed to the fact that you can get access to a large loan amount in very little time.

But despite the convenience it brings to the table, experts advise that you avail of a personal loan only after you have analysed your needs and planned the repayment. By being prudent, you can ensure that the loan helps you manage your financial needs but does not pull you into a debt trap.

To help you estimate the potential cost of a personal loan, lenders have devised an online personal loan EMI calculator that you can use to plan your repayment before you apply for a personal loan.

While you may use the formula to calculate your personal loan equated monthly instalment (EMI) manually, an online calculator is fast, handy, and error free.

How to use a personal loan EMI calculator online?

A personal loan EMI calculator is an online tool that helps determine your EMI and the total interest basis the values for principal, interest rate and tenure that you input.

The calculator uses the following formula:

EMI = [P x R x (1+R)N ]/[(1+R)N-1]

P = Principal or the loan amount

R = Monthly personal loan interest rate

N = Number of EMIs or the tenor

For instance, if you wish to avail of a loan of Rs.10,00,000 at an interest rate of 12.0% and repay it over a tenor of 48 months, you only need to input these values in the online calculator. Here is the output that you will receive:

• Loan EMI = Rs.26,334

• Total interest payable = Rs.2,64,024

• Total payment (Principal + Interest) = Rs.12,64,024

Once you know the personal loan interest rate your lender offers, you can change the values for principal and tenor to suit the EMIs to your repayment capabilities. This way, you can plan your personal loan repayment.

Adjust the tenure for comfortable repayment

Lenders such as Bajaj Finserv offer a personal loan that can be repaid over a flexible tenure of up to 60 months. Choose the tenure after you look at your monthly spends to ensure that loan repayment is not a burden to your pocket.

If you already have ongoing obligations every month, you may opt for a longer tenure. However, you should remember that a longer tenor translates into higher net interest payment.

Conversely, if you choose a shorter tenure, your EMI outgo is likely to be high, even if the net interest payment remains low.

Adjust the principal for an affordable loan

You can also toggle the value for principal in the calculator to arrive at an EMI, which is manageable. Your principal amount is directly proportional to the EMI. This means that if the former increases, the latter increases, and vice versa. Once you have an idea of the EMI that you can service and the tenure you choose, you can work backwards and adjust the loan amount you are applying for.

Now that you know the importance of an EMI calculator and how it works, you can use it to opt for a loan that meets your needs. Do remember to keep the personal loan interest rate and other fees and charges in mind when you apply for it.

If you are looking to avail of one, Bajaj Finserv offers instant personal loans with complete transparency in their terms and conditions. You can apply for a loan from the comfort of your home and receive approval within minutes. What’s more, you can get money in your account within just 24 hours of approval.

Bajaj Finserv also offers pre-approved offers on loans and other products, which can save you time and effort. Check if you qualify for a pre-approved personal loan by entering only your basic details today.

Disclaimer: This content is distributed by Bajaj Finserv. No HT Group journalist is involved in the creation of this content.