Each of us has financial goals, such as purchasing a home or financing our child's education. However, we may not have enough funds to achieve these objectives. In such situations, a Personal Loan can be beneficial. It provides the borrower with Lumpsum money, enabling them to fulfil their financial aspirations by providing adequate funding. However, a Personal Loan also entails rigorous financial planning.

Hence, it is wise to consider several aspects while applying for it. These include your Equated Monthly Instalments, tenure, Loan amount, etc. To assess their appropriateness, you must make detailed calculations that cannot always be done manually. This is when a Personal Loan calculator comes to your rescue. The following are a few things to know about it:

What is a Personal Loan Calculator?

A Personal Loan calculator is a tool used to compute the EMIs a borrower would need to pay to repay a Personal Loan. The calculator typically considers the loan amount, interest rate, and loan tenure to determine the EMI. It presents values instantly once you provide such details.

Ways to use the calculator

• Budget your expenses

The Personal Loan Calculator provides accurate values of the different monetary aspects of your loan. This further assists you in budgeting your expenses accordingly. You arrive at a strategic financial plan for the duration of the tenure. You also know how to repay the borrowed amount on time.

• Calculate EMI payments

Every loan is ideally repaid through EMI payments. However, the value of such payments depends on several factors. This includes your Loan amount, tenure, interest rate, etc. Calculating the same manually is not always a viable option. You could miss out on one factor and, as a result, miscalculate everything. Instead, it is better to use the calculator. This is because it already has specified fields.

It gives you an idea of your EMI amount, helping you know how much you need to save each month. This facilitates efficient financial planning.

• Compare Loan schemes

Nowadays, many banks offer Personal Loans. To make proper comparisons, you can make use of this tool. It will help you assess the different interest rates and tenures, enabling you to come to a fitting conclusion. For example, you can compare the appropriateness of the loan by entering the interest rates offered by different lenders.

• Eligibility check

The calculator lets you check your Loan eligibility. For example, you come across a scheme that you find appealing. But after calculations, you realise that the EMI is too high. In this case, you could alter your tenure to determine a value that fits your budget. If it does not, you can venture into other schemes.

Conclusion:

Using a Personal Loan calculator is relatively simple. It is also free, so you need not worry about unnecessary charges. Considering these perks, utilising this tool to optimise your Loan management is best.