In today’s day and age, there are an abundance of loan options across the country. You can buy anything or fund anything you want by taking out a loan and using an easy and flexible EMI repayment scheme.
EMIs, an abbreviation of Equated Monthly Installment, is the amount payable by you to the lender on a regular monthly basis. It is made of three components – interest, principal amount, and tenure.
To easily calculate your repayment responsibility, EMI calculators are a great resource to understand what your monthly payments will amount to. It’s a wonderfully designed financial tool to help you determine the EMI you are liable to pay by accounting for your requested loan amount, preferred tenure, and chosen interest rate.
Understanding an EMI Calculator
When you are sanctioned an unsecured personal loan, you repay it back with EMIs over a broad period of time called a repayment tenure, usually between 2-5 years. Personal loan EMI calculators help you budget the monthly loan payments against your income and expenses. Most individuals would prefer a longer tenure, especially for big loan amounts, but beware, because that might mean higher interest payments. When opting for a loan tenure, choose only an amount that meets your specific financial goals and no more.
Figuring out an affordable loan amount you really need
Even if you really need a large loan amount, we know it’s better to borrow only the amount you can afford to repay within your capacity. Your personal loan EMI calculations help you choose this affordable loan amount that will meet your basic needs. If you can pay a higher EMIs to meet other bigger needs, you can increase the principal amount. Ensure you maintain a low debt-to-income ratio of about 50%, including other loans and credit debt responsibilities like home or car loans and credit cards. This prevents possibilities of defaulting or delaying your repayments. Ideally, even a bank would not sanction an EMI that crosses over 60% of your income. So make sure you find a loan amount that is suitable or you might expect something higher with interest rates or a short tenure, putting in a higher monthly repayment burden. You can use the Bajaj Finserv Personal Loan EMI Calculator on Finserv MARKETS to find out how loan amounts translate into interest and EMI payments based on your chosen tenure and preferable interest rates. It provides a simplified monthly breakup of both EMI and interest payments monthly so you can budget what you can really afford when you do your financial planning.
Loan Tenures Has Two Main Relationships with EMI and Interest Payments
Loan tenures are simple enough to understand because they have an inverse relationship with the EMIs you will need to pay. This essentially means a shorter loan tenure has higher EMI and a longer tenure have lower EMIs. On the flip side, loan tenures have a positive relationship with interest payments. A shorter tenure means lower interest payments while a longer tenure has higher interests. Ideally, try and get a shorter tenure for a personal loan so you can pay it off as soon as possible. Interest rates on unsecured personal loans are much higher than secured loans like home and car loans, which we will delve into later. You can use the Bajaj Finserv Personal Loan EMI Calculator on Finserv MARKETS to find out how different loan tenures affect the interest and EMI payments. Find the most suitable one, preferably lower as mentioned, to avoid higher interest payments. It even gives you a breakup of both monthly EMI and interest payments to understand what you’re in for and help you figure out how much you can really afford to pay back. Somewhere between 2-3.5 years is always better for a high loan amounts.
Accuracy is a given
Calculating your EMI manually can lead to manual errors. Such incorrect information could potentially deter you from taking a loan to buy your dream house or car. Or even worse, you might see a smaller EMI that you might be able to afford. You might even apply for a loan that’s going to take a chunk out of your paycheck and be difficult on you finances. EMI calculators are a highly recommended tool as they automatically use the set formulas to calculate the payable EMI with accuracy within seconds.
We know that manually figuring your EMI calculations is both difficult and prone to errors and miscalculations. Technology makes it so easy for you to get a quick breakdown of your personal loan EMI payments. The Bajaj Finserv Personal Loan EMI Calculator on Finserv MARKETS is easy to use and its calculations are simple to understand yet detailed enough to know exactly how much you are required to pay. It’s a great financial tool to use and helps you get quick and accurate results for proper financial planning. Calculate any cost for any loan scheme by shifting around different tenures, principal amounts, and interest rates to find a suitable repayment scheme that fits your capacity.
Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.