Everyone has some financial goals, such as purchasing a home or financing their child's education. However, we may not have enough funds to achieve them. In such situations, a Personal Loan helps. It provides the borrower with Lumpsum money, enabling them to fulfil their financial aspirations by providing adequate funding. However, Personal Loans also require rigorous financial planning.
Hence, it is wise to consider several aspects before applying for one. These include your Equated Monthly Instalments, tenure, Loan amount, etc. To assess them, you need to do detailed calculations that cannot be done manually. This is when a Personal Loan calculator enters the picture. The following are a few things to be aware about it.
About the Personal Loan calculator
A Personal Loan calculator is a tool used to compute the EMIs you need to repay towards the Personal Loan. The calculator typically considers the Loan amount, interest rates, and Loan tenure to determine the EMI. It presents values instantly once you add such details.
Ways to use the calculator
- Budget your expenses
When you do online Personal Loan apply, you can access the calculator for accurate values of the different monetary aspects of your Loan. This further helps in budgeting your expenses accordingly. You arrive at a strategic financial plan for the Loan tenure. You also know how to repay the borrowed amount on time.
- Calculate EMIs
Every Loan is ideally repaid through EMI payments. However, the value of such payments depends on numerous factors. This includes your Loan amount, tenure, interest rates, etc. Calculating them manually is not always a viable option. You could miss out on one factor and, as a result, miscalculate everything. Instead, use the calculator. This is because it already has specific fields.
It provides an idea of your EMI amount, helping you become aware of your savings each month. This facilitates efficient financial planning.
- Compare Loans
Nowadays, almost all banks offer a Personal Loan. To make proper comparisons, you can use this tool. It lets you assess the different interest rates and tenures, enabling you to come to a decision. For example, you can compare the Loan options by entering the interest rates offered by different lenders.
- Check eligibility
The calculator lets you check your Loan eligibility. For example, you come across a scheme that you find appealing. But after calculations, you realise that the EMIs are high. In this case, you could alter your tenure to determine a value that fits your budget. If it does not, you can consider other schemes.
Conclusion
Using a Personal Loan calculator is relatively simple. It is also free, so you need not worry about unnecessary charges. Based on these benefits, utilising the calculator to optimise your Loan management is best.