Personal Loans have been the go-to solution for most people for their individual needs and emergency fund requirement
One of the defining features of Personal Loans is that customers don’t need to provide any form of collateral to secure a loan. As a result, the background verification process is much shorter, and funds are disbursed faster upon approval of your application.
During the pandemic, when physical contact was not an option, the Personal Loan application process became contactless and went digital. Nowadays, you can now apply for a Personal Loan online. Just upload your KYC and other documents and get instant approval. Borrowers can also check their loan expenses and the EMI they will have to pay after getting their loan by using a Personal Loan EMI Calculator.
Before we talk about the Personal Loan EMI Calculator in detail, let us first know why people prefer Personal Loans to meet their financial needs over other financial products.
Benefits of a Personal Loan:
- Easy online application process: The Personal Loan application process has become paperless thanks to digital transformation.
- Minimal background checks: Traditional lenders and NBFCs often provide pre-approved Personal Loans to their existing customers.
- Greater flexibility: A Personal Loan comes with flexible usage terms. This means that once your loan gets sanctioned, you can use the funds in any way you choose. There is also greater flexibility regarding your loan tenure and monthly EMI.
- Unsecured loan: Personal Loans are known primarily for being unsecured loans that require no collateral or assets to be pledged, such as gold or property.
The ease of the Personal Loan approval process makes it simple for anyone to borrow a large amount of money without much hassle.
How Do You Use a Personal Loan EMI Calculator?
While borrowing a Personal Loan is easy, the real challenge lies in consistent monthly loan repayments. After the loan amount is disbursed, a Personal Loan EMI becomes a monthly expense you cannot compromise on or avoid until your designated loan tenure ends. Failure to repay the loan for even one month will attract fines and penalties. Not to mention, it will also negatively impact your credit score and your chances of getting credit in the future.
To help borrowers understand their financial commitment, a Personal Loan will demand from their savings. Leading financial institutions like Clix Capital provide a Personal Loan EMI Calculator on their websites. It is a free-to-use tool that lets you calculate your instalments through a Personal Loan before you take the loan. The personal EMI calculator helps you plan your monthly installments till the end of the loan tenure. Here’s how it works:
- Open the website and go to Personal Loan EMI Calculator.
- Add the principal amount and the interest rate the lender is charging on your loan.
- Adjust the Personal Loan tenure using the slider to find the EMI you will pay.
- If the EMI is too high, you could readjust the slider to find a more reasonable amount. Alternatively, you could reduce your principal amount.
Benefits of a Personal Loan EMI Calculator:
1. You can find the most affordable finance and loan management options:
Whether you take a Personal Loan for home renovation or medical expenses, the interest rate you need to pay will make a huge difference. The higher the interest rate, the greater your EMI. With a Personal Loan EMI Calculator, you can better understand your monthly spending by considering the principal and the interest charged. This ensures better loan management and personal financial planning.
2. It helps you understand your loan budget:
Credit cards provide practically limitless credit access to the credit cardholder. This could result in excess debt and avoidable expenses. Meanwhile, a Personal Loan limits your credit to the monthly approved amount, which ensures you can spend in an organised manner. A personal EMI calculator provides an added layer of convenience by showing you how much you can comfortably pay back before you apply for the loan. The monthly Personal Loan instalment can be compared against your income and existing expenses. Thus, you will understand how much you are saving each month and how much you can afford to borrow.
Strategic financial planning and loan management reduce your risk of defaulting on your loan significantly. Additionally, any steps you take to increase your credit score can reduce the interest rate you are provided. This will reduce not only your EMI but also your total loan expense.
Based on the NBFC or financial institution you borrow from, you have greater visibility over hidden charges, such as processing fees and other charges. You thus get a better picture of your spending through your loan tenure.
Points to Consider Before Getting a Personal Loan:
1. Make sure your credit score is above 750:
Before you choose a lender and apply for a personal loan, make sure all your existing payments and current credit card bills are repaid on time. All your loan and credit payments get recorded in your credit history. Timely payments reflect greater financial stability and improve your chances of getting a lower interest rate approval.
2. Compare loan vendors:
Before you choose a Personal Loan provider, compare all the options available in the market. Loan vendors differ in terms of their eligibility criteria, interest rates, and miscellaneous charges that add to your loan expense.
3. Check your total loan expense:
A Personal Loan is a significant financial commitment. You cannot reduce the amount you pay once you commit. Therefore, make sure you borrow an amount that won’t become a financial burden.
So, if you are planning to take a Personal Loan any time soon, make sure a Personal Loan EMI Calculator is a part of your research before applying.