Personal Loan Calculator

A personal loan EMI calculator is a financial planning tool that helps you understand how much you will have to pay as equated monthly instalments (EMIs) on your personal loan. This tool is available free of cost online on the Motilal Oswal Research 360 platform. It can be useful in calculating the EMI for personal loans instantly, with just a few key inputs like the total loan amount, the annual interest rate and the repayment tenure in months.

Using the personal loan EMI calculator can give you a better idea of your potential financial obligations if you avail of this type of loan. This, in turn, can help you figure out how much you can borrow without straining your finances.

A personal loan EMI calculator works on the simple principle of using your inputs to compute the required results. It uses the three details outlined below:

• Loan Amount

  This is the total amount of personal loan that you wish to borrow from the bank or financial institution.

• Rate of Interest

  This is the annual rate of interest levied by the lender on the amount borrowed.

• Repayment Tenure

  This is the tenure over which you will repay the loan. You should enter it in months or years as required by the calculator.

Once you submit these details, the calculator will use the EMI computation formula to find the amount you will have to pay each month. Along with this information, the personal loan EMI calculator will also show you the breakup of the total payment into the interest and principal components. By calculating the EMI for personal loans instantly in this manner, this free online tool makes it easy for you to estimate how much you have to set aside each month to repay your loan.

The PL EMI calculator uses a simple yet effective formula to determine the amount of money payable each month. Check out the formula for calculating the EMI for personal loans below:

EMI = P x r x [(1 + r)n ÷ {(1 + r)n — 1}]

Here,

P is the amount of loan borrowed

r is monthly interest, which is obtained by dividing the annual interest rate by 12

n is the total repayment tenure in months (i.e. the total number of EMIs to be paid)

This formula is typically used for calculating the EMI for personal loans that have a fixed rate of interest. It is not suitable for loans with a reducing interest rate.

An EMI loan calculator for personal loans can be useful to borrowers and interested loan applicants in many ways. The key benefits of using this type of calculator include the following:

• Budgeting Tool

  This is the total amount of personal loan that you wish to borrow from the bank or financial institution. A personal loan EMI calculator helps you understand your monthly financial commitments before taking a loan. By submitting different loan amounts and tenures, you can find an EMI that fits comfortably within your budget. This ensures that you don't overextend your finances and borrow more than you can repay.

• Easy Comparison of Loan Offers

  The calculator also allows you to compare EMIs from different lenders easily. By inputting various interest rates and loan terms, you can quickly assess which loan offer provides the most favourable terms for your financial situation. This helps you make an informed decision and choose the right lender.

• Interest Calculation

  The EMI calculator also breaks down your payments into principal and interest components. This transparency helps you understand the true cost of borrowing by allowing you to see how much you will pay in interest over the loan’s tenure. You can use this information to make more cost-effective borrowing decisions.

• Checking the Affordability of Loans

  By experimenting with different loan amounts and tenures, you can quickly determine the maximum loan amount you can afford based on your desired EMI. This prevents you from applying for loans that might be beyond your repayment capacity, which, in turn, is crucial for maintaining a healthy credit profile.

• Customisable and Cost-Effective

  Personal loan EMI calculators are typically free to use and highly customisable. You can adjust various parameters like loan amount, interest rate and tenure without any cost or commitment. This flexibility allows you to explore multiple loan scenarios without spending money on financial advisory services or being pressured by sales representatives.