Personal Loan Calculator: An Online Tool to Manage Your Finances

Posted by Aditya Vadkar on July 9th, 2019

Whenever you opt for a personal loan from a lender, you agree to repay it along with the applicable interest on it, in the form of equated monthly installments, right? Over a pre-determined period of time, the total sum that you pay to the lender is referred to as EMI’s, which is calculated on the basis of 3 basic parameters, i.e. principal loan amount, tenure (in months), and the interest rate charged on it.  Personal loan EMI calculator is basically an online tool that helps you to calculate your monthly installments in advance towards a particular loan amount. Well, the article is designed to give you a brief idea on what the tool is all about and how you can use it-

Personal Loan EMI Calculator- is programmatically designed an online tool that helps you assess your monthly pay-outs of EMI’s. This eventually, in turn, allows you to chalk out a budget in accordance with your finances. With the help of this online tool, you can opt for an appropriate loan amount, so that you don’t end up defaulting at the time of repayment. There are some lenders who have EMI calculators on their website which you can use anytime, and anywhere.

How to use this tool?

Personal loan calculator spells convenience and ease. All you need to do is enter the variables of the loan amount, i.e. principal loan amount, tenure (in months), and rate of interest. In, most of the lender’s website, there is a slider through which you can adjust the values in the EMI calculator page, or simply enter the values in the relevant boxes. Once you click on the “calculate” button, the payable EMI amount will be displayed on your computer screen instantly. Along with this, there are some lenders who also show the break-up of the total payment, in the form of pie-chart and table. Total payment here we mean- principal amount and interest payable.

How does Personal Loan EMI calculator tool work?

As mentioned above, the interest rate, principal amount and tenure are the three basic key parameters which affect the EMI of your personal loan. Personal loan calculator basically uses these variables and puts them into a simple mathematical formula-

EMI = [P x R x (1+R) ^ N] / [(1+R) ^ N -1]

In this mathematical expression, P, R, and N denote the principal loan amount, R is the rate of interest, and N is tenure (in months).

Along with this, there are some lenders who offer other financial calculators apart from the personal loan calculator to help you make a well-informed decision in your life before availing a loan. After reading the above inputs, the personal loan EMI calculator can prove to be a handy tool when it comes to planning your loan repayments and deciding on the final loan amount.

Hence, you can use this online handy tool to get a precise handle on your personal finances.  Hope this information has been helpful! Happy Borrowing!