Highlight: Using an EMI calculator is essential before a potential borrower takes out a personal loan. Personal loans are even more accessible now on Early Salary!

A personal loan is a credit instrument that has recently gained a lot of appeals, as it is an unsecured loan. It means you don’t have to submit or pledge any assets as security to get a personal loan

The best part is that the borrowed funds can be used for almost any purpose. Personal loan disbursement is also very quick, usually done within one or two working days after approval.

Whenever you take a personal loan, you need to pay the principal amount and the generated interest. Hence, it’s extremely crucial to accurately calculate your EMI or equated monthly installment before you take up a personal loan to avoid any inefficiencies.

Instead of calculating EMI manually, people have started to use online calculators. A lot of banks provide a free-to-use calculator on their online websites. 

When you use an online calculator, you get an idea of the monthly amount you have to repay during your tenure. This is quite helpful as borrowers get an idea of the influence of the loan on their spending and lifestyle. 

Remember! Interest rates vary from bank to bank. You must compare each interest rate before choosing the loan plan which best suits your long-term goals.

Let us now look at why a personal loan EMI calculator is important and beneficial to potential borrowers.

#1 Helps to Plan Your Personal Budget

Once you have gathered all the information on the due amount, you’ll have to repay monthly, planning the rest of your expenditure and savings becomes much easier. You can also chart out all your pending or future loans and gather an idea about all the EMIs you are due. Knowing about your state of finances in advance is always a good idea.

#2 Loan Tenure

EMI calculators allow you to choose the best-suited tenure plan for your loan. If you decide to pay a significant number of EMIs to reduce the interest rate on a loan, the loan’s tenure will be longer, and vice versa. You can change the loan’s value and number of EMIs to find the most effective loan tenure possible. You can also experiment with different loan amounts and tenure to find out the most convenient plan.

#3 Assured healthy credit rating

Prior knowledge of your financial statement will always help you maintain a good credit score. If you know all of your EMIs beforehand, chances of missing out on repayment of the loan amount are slim. This is important as avoiding a poor credit rating is very crucial.

On the other hand, you have to enter your credit rating on the calculator before it provides you with a figure. If it’s bad, then you have to pay increased interest rates. Improve your credit scores in this case.

#4 Interest Rates

The interest you must pay should be the first thing to check out when taking a personal loan. Rates of interest vary depending on the tenure of the loan and the EMI. The calculator makes your job significantly easier by allowing you to choose and test out with different values till you get the best rates suited for you.

#5 Eligibility and Accuracy

The calculator will let you know whether you are eligible for the loan or not based on the information you provide. The formula that will be used on the calculator varies from loan to loan. You may not be aware, but different formulae are used to calculate different sorts of loans. As a result, you won’t have to worry about manually calculating it or wondering if the correct formula was applied. Hence, all the calculations are accurate.

#6 Accessibility

EMI calculators are easily accessible and easy to use as they are online. Customizing the calculator based on your preferences and comparing the different combinations of interest rates and tenure to choose your perfect plan makes the whole process very appealing.

Taking out a personal loan for all your expenses, be it shopping, traveling or education is now even more convenient with EarlySalary. With fast disbursal and no prepayment charges, you don’t have to worry about your budget anymore. To be on the safer side though, opt for an EMI calculator to experience a seamless loan tenure!

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