As per the economic survey for FY2019-20, the origination volume of personal loans witnessed a Y-O-Y increase of 134%. While other credit segments witnessed a tepid growth during the economic slowdown, personal loans bucked this trend, witnessing a gradual growth.
· For the same period, personal loans occupied as much as 28% of the total credit segment.
· Also, individuals with regular income and those drawing salaries contributed to Y-O-Y personal loan growth of 13.3% by July 2020.
Combined with a great financial discipline, personal loans can be a beneficial funding option that is easily manageable. One of the best ways to manage personal loans is through an online personal loan calculator.
What is a personal loan calculator?
Online personal loan calculators are customised financial tools that enable individuals to make credit decisions based on results obtained. Some of the top personal loan calculators include –
a) EMI calculator.
b) Eligibility calculator.
c) Foreclosure calculator.
d) Part-prepayment calculator.
e) Personal loan vs credit card calculator.
Individuals can thus use these calculators to get the most out of personal lending. Out of these, the first two are the most widely used calculators and help with critical borrowing decisions.
For instance, an EMI calculator enables users to decide on a suitable loan amount and tenor based on their eligibility for improved chances of approval. One must thus know how to calculate loan EMI with this calculator to arrive at the necessary decisions.
How to use the personal loan EMI calculator?
EMI calculation is essential to deciding the loan amount and tenor that enables affordable instalments. One can easily learn how to calculate personal loan EMIs in the following few steps.
1. Visit the lender website hosting the online personal loan calculator and navigate to the tool’s page.
2. Next, select the loan amount, tenor, and applicable interest rate to arrive at your EMIs payable.
3. Once the entries are made, the calculator also displays the total loan amount payable and the total interest payable until the selected tenor’s end.
4. Alter the loan amount entries to arrive at a proportionately adjusted EMI amount as per your repayment capacity.
5. You can also alter the tenor values entered for an adjusted EMI amount.
With this understanding of how to use an EMI calculator, you must also note that, unlike the loan amount, tenor value is inversely proportional to the EMI amount calculated but directly affects the total interest payable. An increased tenor would thus reduce the EMIs but increase the interest value and vice versa.
Similarly, one must also be aware of the use of an online personal loan calculator for eligibility as it would help determine the maximum loan amount one can avail of based on various lender criteria. Here’s a look.
Steps to check your eligibility for a personal loan
Several lenders provide online personal loan calculators to enable users to assess their maximum loan amount eligibility. You can thus select a suitable lender or third party providing this tool and follow the steps given below.
Step 1: Visit the selected lender/third party website and navigate to the online personal loan calculator page.
Step 2: Fill in your name and date of birth.
Step 3: Next, provide the essential financial details required, including your income, expenses, and city of residence.
Step 4: Once entered, the calculator will display the maximum personal loan amount you can avail as per your current eligibility.
Lenders like Bajaj Finserv host all these calculators, among other customised tools to help with your crucial financial decisions. You can use these personal loan calculators for free. They also enable hassle-free financing with their online loan application and paperless processing.
The lending institution also simplifies this process, making it less time-consuming through their pre-approved offers available on a range of financial products, like personal loans, business loans, credit cards, etc. You can check your pre-approved offer only with your name and contact details.
You must thus decide after considering all these factors when selecting a suitable repayment tenor. Also consider other essential details related to the loan before applying, such as interest rate, fees, and charges, etc. for lender selection.