What is Personal Loan EMI?
An equated monthly instalment (EMI) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. Equated monthly instalments are used to pay off both interest and principal each month so that over a specified number of years, the loan is paid off in full. With most common types of loans, such as personal loans, the borrower makes fixed periodic payments to the lender over the course of several years with the goal of retiring the loan.
The basic principal behind the personal loan equated monthly instalment calculator are two particular formulae. The first one is the one used to calculate the monthly interest rate and the second one is the one used to calculate the EMI itself.
How to use Compareraja's Personal Loan EMI calculator?
With the help of comapreraja’s EMI calculator, you can easily calculate your EMI. To know the same, you need to enter the following information in the EMI calculator:
Principal loan amount you wish to avail (rupees)
Rate of interest (percentage)
Loan term (months or years)
Processing fees (percentage)
Once you enter all the details and click on ‘calculate EMI’, our EMI calculator will provide you detailed information about the EMI.
How does the Personal Loan EMI calculator work?
The EMI could be calculated using the flat rate method or the reducing balance method. The EMI flat rate formula is calculated by summing the principal loan amount and the interest on the principal. The sum is divided by the number of periods in months.
The EMI reducing balance method is calculated using the formula
(P x I) x ((1 + r)n)/ (t x ((1 + r)n)- 1)
in which P is equal to the principal amount borrowed, I is the annual interest rate, r is periodic monthly interest rate, n is the total number of monthly payments and t is the number of months in a year.
Features and Benefits of a Personal Loan EMI Calculator
When you decide to take a personal loan one of the most valuable tools you will ever use with regards this loan is the Personal loan EMI calculator. Unlike home or car loans, a personal loan can be one of the most convenient sources of funds since it does not come with any conditions attached to how the money is used. There are a lot of things that need to be taken into consideration when deciding on the ideal amount to borrow. There is the consideration of the amount that you want to borrow, the amount you will have to pay as interest, the duration for which you want to take the loan and, of course, and the interest rates. It is the personal loan EMI calculator helps you make these decisions.