The Ultimate Guide to Using a Personal Loan EMI Calculator

Personal loans are a valuable financial resource that provides quick access to funds for various needs—whether it's addressing unexpected medical expenses, making home repairs, or consolidating existing debt. While these loans can be incredibly helpful, effective financial planning is essential to ensure you can repay them without missing Equated Monthly Instalment (EMI) payments. That’s where a personal loan EMI calculator comes in handy. This powerful tool can assist you in determining the optimal loan amount and a repayment plan tailored to your situation. 

In this article, we’ll explore how to use a personal loan calculator to find the right loan option that meets your needs.

Understanding equated monthly instalments 

Before we look at how to use a personal loan EMI calculator, let us understand the fundamental concept of EMIs. EMI refers to the fixed amount of money that you need to pay to the lender every month after taking on a loan. 

The EMI amount includes both the principal and the interest charged by the lender and is spread over a specific period. The loan repayment period can vary from a few months to a few years, depending on the type of loan and repayment plan chosen. 

What is a personal loan EMI calculator? 

A personal loan EMI calculator is an online tool offered by most bank websites and finance-related web publications. The EMI calculator allows you to estimate and understand the monthly EMI payments you will need to make when you take a personal loan of a certain amount. 

The calculator takes into account all the variables involved, such as loan amount, rate of interest charged, and loan duration, to give you the EMI amount you will need to pay every month until the loan is closed off. This tool is easy to use and can help you plan your loan repayment effectively. 

How to use a personal loan EMI calculator

Using the personal loan EMI calculator is a fairly straightforward process. Here are the simple steps that you will need to follow in order to use a personal loan EMI calculator: 

Enter the loan amount: As the first step, you will need to enter the loan amount into the personal loan EMI calculator. You can decide the loan amount depending on your needs and eligibility. 

Interest rate: As the next step, you will need to enter the interest rate that will be applicable to your personal loan. You can compare the interest rates offered by various loan providers/banks and experiment with them using the calculator. 

Loan duration: Finally, you will need to enter the loan tenure or loan duration. This is the duration over which the loan will be repaid, which can range anywhere from just a few months to a few years. 

Once you enter all the above variables, the personal loan calculator will display the EMI amount you will need to pay every month. Additionally, it provides a detailed breakdown of the total amount to be repaid, including both the principal and the total interest you’ll pay throughout the loan term.

Let’s understand how to use a personal loan EMI calculator with the help of an example. Let’s say you want to take a personal loan of ₹1,00,000 for a tenure of 2 years (24 months), and the bank is offering you an interest rate of 10% per annum. 

By entering all the above variables into a personal loan EMI calculator, you can determine that your EMI will come around to ₹4,614. The interest that you will pay over the duration of the loan will be ₹10,748, and the total amount repaid will be ₹1,10,748. 

Benefits of using a personal loan EMI calculator

Here is why you should be using a personal loan EMI calculator for your loan planning process: 

Transparency in repayment: The calculator can help you determine exactly how much money you will need to repay each month as EMIs. This is crucial, as it will help you plan your monthly finances and expenses better. If you feel you cannot repay the EMIs, try to reduce the loan amount or reduce your monthly expenses to make space for EMI payments. 

Efficient and accurate: Instead of manually calculating your EMIs, the calculator can give a clear picture of your monthly EMI dues in just a few seconds. Moreover, the calculator also offers an extremely precise result devoid of human error. 

Comparing loan offers: Using an online personal loan EMI calculator, you can compare the loans and interest rates offered by different banks to understand which one suits your needs. You can experiment by changing the tenures and loan amounts to come to an optimal combination. 

Avoid unaffordable loans: Most importantly, by understanding how much EMI repayments you can comfortably afford, you can decide on the right loan amount to apply for. It ensures that you do not take an unaffordable loan and end up in an unfortunate debt trap where you are not capable of repayment.

If you are looking to get an affordable personal loan with good terms, consider applying for the IndusInd Bank Instant Personal Loan. Some of the key features of this Instant Personal Loan are: 

• A 100% digital application process with video KYC
• Competitive interest rates and flexible repayment terms 
• Personal loans ranging from ₹30,000 to ₹5 lakh
• The intuitive IndusMobile app allows you to manage your personal loan EMIs easily
  
   

To conclude

A personal loan EMI calculator is an invaluable tool that can help you plan out your loan and EMI payments in a responsible and sustainable manner. By inputting various loan amounts, tenures, and interest rates, you can get a clear idea of what kind of loan is affordable and suitable for your needs. Moreover, you can compare the loans offered by various banks to see which is the most beneficial option for you. Ensure that you make your EMI payments on time to maintain a healthy credit score.