In the Indian debt industry, personal loans are the mostly availed product by potential borrowers. In fact, 78% of loans taken in India come under the personal loan category. However, individuals need to be aware of certain aspects of the personal loan, such as the interest rate and monthly EMI amount they are responsible for paying back, as repayment can be a challenging task.
Calculating the EMI amount for a credit fund can involve many variables and may be difficult for those who are unfamiliar with the details. Fortunately, the personal loan EMI calculator has become the best tool for obtaining error-free and fast results to determine the monthly repayment amount. In the section below, we’ll discuss how to calculate personal loan interest rates.
How is a Personal Loan Calculator Helpful?
Performing complex calculations about the personal loan interest rate can take a lot of time, but with this calculator, you can get the results in seconds. The personal loan calculator not only gives accurate and error-free results but saves time; but, it also helps you establish the best strategy to make repayment beforehand.
- Resolve the complex calculations
- Give accurate results
- Ease to plan the repayment strategy
Formula to Calculate
To get an accurate result, a standard formula is used by all the calculators available online.
The standardized method helps you calculate the exact amount of money you will repay as EMI against the credit fund.
Mathematical formula
Equated Monthly Installment = [P x R x (1+R) ^N]/ [(1+R) ^ (N-1)]
Where
P= Principal Amount
R= Rate of Interest
N= Tenure of Loan Repayment
By using the above formula, you can get an accurate result. You must also have the personal loan app to get started.
Let’s Understand With Logical Reasoning
Mr. X avails a personal loan credit fund of Rs. 10 Lakh for a tenure of 3 years, and the interest rate is 10%. Instead of calculating the complex equation, putting all the values in the online calculator is a better option.
The result obtained by the personal loan EMI calculator for this equation is
| Monthly EMI | 32,267 |
| Rate of Interest | 1,16,619 |
| Principal amount | 1000000 |
| Total value | 11,16,619 |
The Main Benefits of Using a Personal Loan EMI Calculator
There are multiple advantages of using a personal loan EMI calculator, including
1. Accurate Estimation of Loan Costs
The calculator helps you know exactly how much you must repay, including interest charges.
2. Comparison of Different Loan Options
To find the most cost-effective way, you have the option to compare loans from different lenders.
3. Financial Planning
The calculator shows your monthly repayment amount, helping you plan your expenses and manage your budget.
4. Time-Saving
The calculator provides instant results, saving you time and effort in manual calculations.
5. Better Decision Making
You can assess how different interest rates and loan terms affect your repayment amount, helping you make informed decisions.
6. Transparent Process
The calculator shows a breakdown of the repayment amount, making the loan process more transparent.
Conclusion
Using a personal loan interest rate calculator, you can examine accurate loan costs, allow you to compare options, help with financial planning, save time, support decision-making, and ensure transparency in the loan process.
