Defaulting in personal loan repayment is a civil offence for which individuals may have to end up paying a significant amount as a penalty. The lending institutions can also resort to legal proceedings against defaulters under the Negotiable Instrument Act of India if they miss three successive EMIs.
Individuals, in most cases, encounter such harsh scenarios for borrowing in an unplanned way. By using a personal loan interest rate calculator, they can borrow considering their financial capacity and plan repayment properly, thereby avoiding the chances of missing EMI payments.
What is a personal loan interest rate calculator?
A personal loan interest rate calculator is a virtual tool that helps individuals understand the instalment amount of their debt at a certain borrowing rate and tenor. They simply need to enter the relevant data, including the interest rate, loan amount and their preferred repayment period, into the input boxes of this calculator to get the EMI.
Features and benefits of a personal loan interest rate calculator
Following are some of the major benefits individuals can obtain by using this personal loan interest rate calculator:
Individuals can easily understand their EMI amounts simply by entering the inputs. By leveraging the tool, they can avoid lengthy manual calculations that consume much of their time and effort. Being a computerised programme, this online tool gives accurate results in no time.
Knowing suitable tenor
The tool lets intending borrowers find a tenor that gives them an instalment amount within their budget. For this, they need to provide the values of interest rate and loan amount and apply permutation and combination methods with the value of the repayment period. In other words, they need to change the tenor till they get a manageable instalment amount. This way, they can choose a tenor according to their financial capacity and repay conveniently. Alongside this, they also need to know other ways how they can plan their personal loan repayment better.
Comparing loan offers
The personal loan interest rate calculator also lets users know the total interest outgo of a credit offer. So, leveraging this feature, they can check which offer can help them keep the interest outgo at a minimum. This way, they can ensure a higher personal loan ROI by securing a cost-effective debt.
Besides knowing the benefits of using a personal loan, they should also be aware of how to choose a lending institution for a personal loan.
Ways to choose a personal loan offer
Here are some aspects that borrowers need to check while selecting a personal loan offer:
Interest rate is one of the major aspects that affect the borrowing cost of debt. To reduce their payable interest amount, individuals need to find a lending institution that charges a lower lending rate. Alongside this, individuals also need to be aware of the factors that affect their personal loan rates.
Individuals also need to compare lending institutions according to associated charges of a personal loan, including processing fees, stamp duty, repayment/foreclosure charges, etc. Besides the interest rate, all these charges also significantly affect the overall cost of debt.
Flexibility in tenor
Intending borrowers must ensure they get a flexible tenor, enabling them to choose a suitable repayment period. It will help them pay their instalments conveniently and reduce the risk of financial difficulties while repaying the loan. In this regard, they also need to know the ways to find the right personal loan tenor that works for them.
After finding the right lending institution, individuals need to apply for a personal loan to meet their credit shortage instantly.
How to apply for a personal loan
Here are the simple steps to follow to apply for this emergency loan:
Step 1: Visit the preferred lender’s website
Step 2: Enter some personal detail and the mobile number
Step 3: Provide the OTP
Step 4: Mention your personal, professional and income details
Step 5: State the amount to be borrowed
Step 6: Submit the filled-in application form
Through these easy steps, individuals will successfully complete their loan application process.
Furthermore, various financial institutions also extend pre-approved offers to their customers on financial products such as personal loan, business loan and credit card. Customers can accept these offers to ensure a quicker loan application process. They only need to mention their names and contact details to check their pre-approved offers.
In conclusion, a personal loan interest rate calculator helps individuals understand their loan obligations. By knowing the instalment amount, they can make proper financial plans so that the repayment does not become a stressful affair.