The recent economic downturn left a significant effect on borrowers’ repayment capacity across the board. In July 2021, 33.2% of auto-debit transactions failed due to insufficient funds, as per reports from NACH.
To ensure a better borrowing experience during such a crisis, most financial institutions kept the provision of using online financial instruments like personal loan interest calculators on their official websites where individuals can determine the EMIs and interest outgo.
Benefits of Personal Loan Interest Calculator
Owing to the ‘no end-use restrictions’ feature, zero collateral, quicker processing etc., personal loans are one of the most popular funding models. Although it allows borrowers to obtain a substantial amount without pledging any high-value asset, they often end up over-borrowing and falling into a debt trap.
Therefore, even if borrowers are planning to avail of such emergency loans to meet any monetary requirements, they must use this online personal loan calculator to plan their finances and repayment strategies accordingly.
Here are some of the prominent benefits of using this online financial tool:
- Helps in comparing interest rates
Personal loan interest rate plays a significant role in deciding the total loan outstanding. Moreover, this interest rate alters across lenders and also depends on a borrower’s credit profile. Hence, individuals can take the assistance of these online calculators to check how movement in interest rate can affect the applicable interest rate.
Furthermore, if the displayed result is suitable for a borrower, they can settle for the same. Apart from these, individuals need to know how CIBIL score is important for personal lending. This is because, with a good score and repayment history, one can negotiate for better rates with the lender.
Moreover, individuals need to choose the loan amount and repayment tenor carefully since interest rates differ depending on that as well. Usually, most lenders mention the range of personal loan ROI on their official websites. Hence, it becomes convenient for the borrowers to estimate EMIs with this calculator.
- Display genuine results
Calculating EMIs manually often becomes a tedious task and often provides inaccurate results, thereby hampering the overall repayment strategy. An interest calculator leaves no space for errors and provides accurate results.
Moreover, these online devices display results within a few seconds, thereby reducing the time required to apply for a personal loan.
- Get access to an amortisation schedule
This personal loan interest calculator allows borrowers to calculate the EMIs and provides a detailed break-up of EMI. This detailed break up is commonly known as a loan amortisation schedule.
With this amortisation schedule, individuals will have a fair idea about how EMIs move throughout the tenor. Moreover, this schedule provides insights on the principal and interest components of each instalment.
With this convenience, one can plan their personal loan EMI repayment better and manage finances efficiently. In addition, by knowing about how many EMIs are left to be paid, due dates etc., individuals can avoid penalties or delayed payment charges.
- Choose the right tenor
When it comes to deciding personal loan EMIs, both interest and principal components have significant parts to play. Although choosing an extended tenor can ensure affordable EMIs, however, on the other side, it increases the total interest payments. Therefore, it is advised to take the assistance of an online calculator to decide the right personal loan tenor that works for you.
How to Use a Personal Loan Interest Calculator?
Here is a step-wise procedure of using a personal loan interest calculator:
Step 1- Firstly, visit the official portal of the preferred lender and seek the EMI calculator right from the drop-down menu.
Step 2- Input the personal loan amount, your preferable tenor and applied interest rate as well
Step 3- Now, click on ‘Calculate’, and the result will be displayed within seconds
Apart from providing free EMI calculators on the website, reputed lenders like Bajaj Finserv extend exclusive pre-approved offers. These offers streamline a loan application process and save time. Such offers are applicable on a wide range of financing options such as business loans, personal loans, credit cards etc. Individuals can check their pre-approved offers by mentioning their names and contact details.
To sum up, access to a personal loan interest calculator helps prospective borrowers to compute their monthly obligations and get a detailed overview of a loan offer. Hence, it helps prospective borrowers to make sound loan decisions.