Before you apply for a Personal Loan, use an EMI calculator. It helps you estimate your monthly instalments, giving you clarity and confidence in your decision. Additionally, it ensures you plan wisely and avoid unexpected repayment surprises. Here is why it matters to consider using one before applying for the Loan:
Estimate Loan amount
Banks usually offer Personal Loans up to Rs. 40 lakh. Meanwhile, tenure usually ranges from 12 to 84 months. Using an EMI calculator helps you see how tenure affects your monthly outflow, letting you choose a suitable Loan amount. This helps you understand whether to proceed with your Personal Loan application.
Assess interest and EMIs
Try using the Personal Loan EMI calculator from your bank’s website. The calculator lets you input the Loan amount, interest rate, and tenure. Then, it shows your monthly payment immediately. EMIs depend on the interest rate, which usually starts at 11.25% per annum. Knowing the interest rate and EMIs in advance helps you set realistic repayment expectations.
Visualise the repayment plan
The calculator shows repayment schedules clearly. You can see how much of each payment is applied to the principal and how much interest you must pay. This helps you understand how your dues decrease over time, enabling you to match your EMIs with your monthly budget.
Explore different interest rate scenarios
Interest rates vary based on the bank. Reviewing different interest rates in the calculator helps you understand how interest rates change and affect your final EMI. By doing so, you will be better prepared for potential fluctuations.
Factor in charges
Borrowing a Loan involves additional fees beyond the interest rate. Banks charge additional fees, such as processing fees, which are typically charged up to 2% of the Loan amount, including GST. Prepayment charges are also applicable. They are charged 3% for Loan tenures of up to 36 months and 2% thereafter. Using the EMI calculator alongside these charges gives clarity about your repayment costs.
Align with income goals
An EMI needs to fit within your monthly budget. The Personal Loan EMI calculator helps you test various Loan amounts under this limit. This way, you can easily select a Loan amount that does not strain your income. Doing so ensures your repayments are done comfortably.
Make smarter decisions
Since an EMI calculator lets you experiment with different figures, you can try shorter or longer tenures and assess how EMI changes with each one. It helps you select a Loan option that aligns with your financial goals. This planning leads to better control over your finances and borrowing decisions.
Conclusion
Using a Personal Loan EMI calculator before applying helps you estimate monthly payments, test different scenarios, and align the Loan with your income. It supports informed borrowing and prevents financial strain. With clear repayment plans and realistic goals, you can confidently apply and steer your Loan journey towards success.
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