### Personal Loan Calculator

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What is a Personal Loan EMI Calculator?
A Personal Loan EMI Calculator is a tool devised to calculate the EMI that a personal loan borrower stands liable to pay each month towards repayment of the loan. The Personal Loan EMI Calculator calculates the EMI once you input three simple details. The following are the details that you input in the Personal Loan EMI Calculator:

Loan Amount: On the Personal Loan EMI Calculator the first figure that you need to input is the amount you wish to borrow as a personal loan as per your requirements. Ideally, the personal loan EMI you wish to avail should not exceed 40% of your monthly income.

Interest Rate: The interest rate is the next value that you need to input on the Personal Loan Calculator. The interest rate here is the rate of interest that is levied on the personal loan amount. This interest rate can be either floating interest rate or fixed interest rate. If the interest rate is fixed, then the rate remains the same throughout the tenure of the loan and the EMI calculated is the same for each month. In other words, each installment is equal to the other. If the interest rate is floating then the rate changes from time to time as per the base rate, thus the EMI’s vary.

Tenure: The third value input that you will have to make on the Personal Loan EMI Calculator is the loan tenure. The loan tenure is the time period within which you shall repay the loan. The loan tenure usually is between 1 to 5 years. The tenure can increase based on your eligibility. Most banks and financial institutions offer flexible tenures for personal loans. This means that you as an applicant have the choice of selecting personal loan tenure as per your convenience, requirements and other financial obligations.

What is a Personal Loan EMI?
EMI stands for Equated Monthly Installment. It is an amount of money a loan borrower is liable to pay each month throughout the tenure of the loan to repay the loan amount. Each of the EMIs paid includes a portion of the amount due. It includes a proportion of both the principal amount and the interest payable on the loan amount. A personal loan EMI is the monthly repayment installment that a personal loan borrower has to pay as per the amortization schedule. The Personal Loan EMI Calculator can be used to accurately and quickly calculate your loan EMI. The initial few installments of the Personal Loan EMI contributes more towards the payment of the interest due on the personal loan amount than the principal. For the same amount of personal loan amount, interest rate and tenure, the amortization schedule and the EMI calculation offered by different financial institutions such as banks are generally alike. The payment of each personal loan EMI reduces the personal loan principal amount. The pattern of such reduction will be similar for all financial institutions.

How is the Personal Loan EMI Calculated?
The Personal Loan EMI is the monthly installment that is payable to the financial institution you have availed the loan from till the date the loan is completely paid off. The arithmetic formula for the calculation of the Personal Loan EMI is
E = P * r * (1+r)^n / ((1+r)^n-1)
In the formula,
E= The Personal Loan EMI Amount.
P= Principal Loan Amount.
r= The Interest Rate that is calculated on a monthly basis (for example the rate of annual interest is 10.5% the r= 10.5/12/100=0.00875)
n= The Loan Tenure/ duration of the loan in the number of months.
For Example: You wish to take a personal loan for an amount of Rs 10,00,000 from a financial institution such as a bank at an interest rate of 10.5% p.a for a period of 10 years (120 months). The calculation of your personal loan EMI is as follows:
EMI = Rs.10,00,000 * 0.00875 * (1 + 0.00875)120 / ((1 + 0.00875)120 – 1) = Rs.13,493
Therefore the total amount payable is Rs. 13,493*120 = Rs.16,19,220.
Hence the Amount of interest payable towards the loan is Rs16,19,220-Rs. 10,00,000 = Rs.6,19,220
What are the Advantages of Using a Personal Loan EMI Calculator?
You can always use a Personal Loan EMI Calculator before taking the decision of availing a personal loan. Some of the significant advantages of using a Personal Loan EMI Calculator are as follows:

Time-saving tool: A Personal Loan EMI Calculator is a tool devised to make the complex calculation of a Personal Loan EMI in just a few seconds. This saves immense effort and time. You just need to fill three simple values related to your loan and then the Personal Loan EMI Calculator displays the result instantly.

No tedious calculations: Manual calculation of the personal loan EMI is a time consuming, error prone and cumbersome process. You can totally avoid the tedious and not so reliable manual calculation by using Fingyan’s Personal Loan EMI Calculator. Why should you go through the pain of making tedious calculations when you have an efficient Personal Loan EMI Calculator at your disposal?

Accuracy: The formula for calculating a personal loan EMI is complex and tedious. Manual calculation of this formula stands at the risk of an error. The Personal Loan EMI Calculator is designed to give fast and accurate calculation. The possibility of error is none or negligible. For accurate results, it is wise to use a Personal Loan EMI Calculator.

Assessment of Repayment Capacity: Once you enter the details regarding the loan amount, tenure and interest rate into the Personal Loan EMI Calculator, it displays the result instantly. The result displayed or the EMI amount is a crucial deciding factor. Based on this amount you can decide whether or not you are comfortable in paying the monthly EMI without straining your finances. This figure tells you how much you need to set aside towards repaying the personal loan amount. Hence you can use the Personal Loan EMI Calculator to assess your loan repayment capacity and plan your finances in advance and pay off the loan amount with ease.
Select from the best personal loan options in the market: Using a Personal Loan EMI Calculator, you can compare different personal loan options available in the market on the basis of your requirements and eligibility. It is wise to compare different personal loan options available in the market in order to select the one with the lowest EMI.

How does the Personal Loan EMI Calculator work?

Fingyan’s Personal Loan EMI Calculator is a fairly easy device to use. When you are on the homepage of Fingyan.com, you can go to the main menu, click on the loan category and select personal loan from the drop-down menu. This will lead you to the Personal Loan EMI Calculator. You need to fill three simple details related to your personal loan namely the loan amount, the tenure in months, and the interest rate. After this click on the calculate button, the Personal Loan EMI Calculator will run the EMI formula, and in a split second the Personal Loan EMI Calculator will display the EMI amount that you have to pay each month towards repayment of the loan.

What are the Advantages of a Personal Loan?

Some of the significant advantages associated with availing a personal loan are specified below.

Lower interest rate than credit cards: Usually a personal loan can be availed with an interest rate that is lower than that levied on the credit cards especially when you have a good credit score. For larger purchases, this can prove to be quite advantageous.

No collateral required: In order to avail a personal loan, you don’t need to arrange for collateral, unlike other loans. A personal loan is easy to procure because it is an unsecured loan.

No limitation on end use: A personal loan once availed does not have any limitation on its end use unlike other loans such as a home loan. A personal loan can be utilized for any purpose. Any urgent requirement of funds can be catered to with a personal loan.

Quick disbursal: Once the applicant meets the eligibility criteria and the financial institution confirms your good credit score, it is disbursed quickly, and you shall get the loan amount in a span of 72 hours. For existing customers, some banks offer online personal loan approval that is even faster.

Fixed rate of interest: Usually a personal loan is offered at a fixed rate of interest. Therefore the EMI that is to be payable each month is exactly the same throughout the personal loan tenure. When you are looking at getting a personal loan, you don’t need to worry about changing interest rates.

Tenure flexibility: The loan applicant has the power to choose the personal loan tenure as per his/her requirement, and at his/her discretion. A longer tenure means that you have to pay a lower EMI. Usually, the tenure for a personal loan varies between 1 to 7 years and more.

Tax benefit: Once you have taken a personal loan and the end use comprises of construction of your house, renovation of the house, or payment of down payment for a house, then you can avail a tax deduction up to a sum of Rs.2, 00,000 under the section 24B of the Income Tax Act 1961. However, a lot of document trail is required for the same to prove that the loan amount has been used only for this purpose.

Convenient repayment: In order to repay your personal loan and pay EMIs there are several convenient payment options available such as ECS, Bank A/c Debit, post-dated cheques.

Minimal documentation: Unlike other procedures associated to other forms of loans, the acquisition of a personal loan only requires the bare minimum documentation for loan approval especially because it does not require to arrange collateral hence you can avoid the whole process of asset verification. Hence a personal loan is available very easily and very fast.

Consolidate debt: A personal loan availed at a lower interest rate can be availed to consolidate high-interest debts. On the basis of your circumstances, you can choose to use a single large personal loan amount with the low-interest rate to pay off several small amount high-interest debts. This will lower the interest amount that you were previously liable to pay.

Smooth cash flow: A personal loan can easily come handy if you have a business that requires liquidity and a smooth cash flow at all times. Taking a personal loan can be beneficial to fill in a temporary gap. Say you have a business where the client made the payment late, a personal loan can be used to keep the wheel running. However, before taking a personal loan, you must assess your cash flow situation and determine whether you and your business will benefit from a personal loan or not. An alternative way of using a personal loan is getting a personal line of credit in place of an installment loan. These are available at low interest rates. An advantage of using this alternative is that you can use the line of credit to smoothen the cash flow and repay the borrowed amount even before the bank charges any interest.

With so many benefits a personal loan is ideal financial assistance.

Personal Loan Eligibility Criteria

Even though a personal loan is easy to avail you still have to meet a few mandatory personal loan eligibility criteria. Banks offer personal loans to self-employed professionals, non-professionals, and individuals. The eligibility criteria vary from one bank to the other. Some of the common criteria used by banks for individuals are specified below.
Maximum age: 60 years
Minimum age: 21 years
Minimum monthly income: Rs.15, 000 (This may vary from one bank to the other)
Total years of the job: 2 years
Stay at the current residence: 1 year