FY 2020 saw an unprecedented increase in the demand for unsecured credits. Latest estimates suggest that personal loan borrowings increased at a rate of 28% on a year-on-year basis between July and September this year. It indicates that an ever-increasing number of credit seekers are availing of this loan option for meeting various one-time expenses.
Such inclination is directly proportional to the features and benefits this type of loans provide, one of the most essential of which is its easy repayment options. Nonetheless, to make the most of such user-centric features, borrowers must adopt a sound strategy to repay the loan on time. One should determine their repayment capability, current obligations, and budget before using a personal loan EMI calculator to calculate the payable instalments.
Role of personal loan calculator in loan repayment
Essentially, a personal loan EMI calculator is a financial tool that helps one to ascertain the monthly loan instalment accurately. Borrowers can enjoy these benefits from using an EMI calculator –
- Ease of usage
- Instant and accurate calculation
- Opportunity to adjust inputs
- Feasibility to compare different loan options within a short time
To understand the role of a personal loan calculator in loan repayment, prospective borrowers must take a closer look at the features and benefits of the financial tool in general.
Helps to ascertain the cost of a credit
Typically, the cost of a loan depends on the rate of interest extended by the lender. One can quickly gauge the cost of a personal loan by entering the interest rate accompanying the amount he/she wants to borrow and other loan factors.
It must be noted that the applicable rate of interest depends on multiple factors—for instance, applicant’s creditworthiness, income, age, tenure, etc. among others.
Helps determine EMI
Typically, loan EMI depends on factors like – personal loan interest rate, tenure, etc. Since the EMI calculator offers immediate results and permits prompt adjustments to the loan input, it facilitates useful comparison. Consequently, it helps to find a suitable combination of the loan value and EMI amount.
This not only helps to pick a feasible EMI but also helps to understand how the same impacts a borrower’s repayment capability. In turn, it proves useful in planning personal loan EMI repayment better without straining one’s available finances.
Helps to pick a suitable tenure
Like discussed, loan tenure is among the factors that influence the cost of availing a loan. Typically, personal loans offer a flexible repayment term that ranges up to 60 months. With the help of a personal loan EMI calculator, individuals can pick a loan tenure that matches their repayment capacity.
In general, longer repayment tenure leads to a small payable EMI but increases the overall cost of borrowing. On the other hand, a shorter tenure enables borrowers to pay off their debt quicker. With the help of an EMI calculator, individuals can determine whether a long or a short tenure will suit their immediate repayment capability.
To further make their loan repayment experience smooth, individuals can avail of a personal credit from financial institutions like Bajaj Finserv, who extend easy repayment terms. Such leading financial institutions are also known for extending personal loan without documents to existing customers against attractive rates of interest.
Pre-approved offers for existing customers makes the application process hassle-free and time-saving. Such offers are available on multiple financial products, including unsecured credit options like personal loans and business loans. You can check your pre-approved offer now by entering your name and contact number.
Informs about the amortisation table
A loan EMI calculator displays an amortisation table after loan details like principal loan amount, tenure and loan interest is entered in the designated fields. Such a table offers insight about the payment division regarding the principal and interest component.
Additionally, such an informative table also displays the percentage to be paid off by the end of a year and accompanying EMI. With the help of such a table, individuals can plan their repayment more effectively as this financial tool helps to understand how part-payments influence the loan burden.
Facilitates better financial plan
The role of a personal loan calculator is indispensable when it comes to planning repayment. It does not just help to compare the offerings of different loan options but also offers a fair idea of how to tweak one’s monthly budget to accommodate smooth pay-offs.
Having a clear idea about one’s payable monthly instalments, individuals can plan their monthly budget or tweak unwarranted expenses successfully. Such a plan will enable individuals to ensure smooth repayment without straining their available finances.
By utilising these features and accompanying benefits, individuals can make the most of an EMI calculator. Consequently, they will be able to pick a suitable repayment plan and will streamline the entire process with greater ease.