Personal loan: If you are planning to take a personal loan from a bank, an NBFC or a fintech platform, it is advisable to use a personal loan EMI calculator to check the monthly instalment based on certain key variables. These crucial variables are the amount of loan, the rate of interest and the loan tenure.
As you enter these three variables in an EMI calculator, you can find out the amount of the personal loan EMI. Now, if you want to decrease or increase your EMI, you can tweak these inputs as per your convenience. Let us understand this with the help of an illustration.
For instance, you want to take a ₹10 lakh loan which is being offered at 11 per cent interest, and you initially intend to repay it in 5 years. The EMI in this case would be ₹32,738, as per the EMI calculator.
Scenario I (You want a higher EMI): Suppose you can afford to pay a higher EMI, then you will have to shorten the tenure to repay the loan in a shorter time frame. So, if you reduce the loan tenure from 36 to 30 months, the new EMI will proportionately increase to ₹38,278.
You can easily check your EMI before opting for a personal loan
And if you further shorten the loan tenure to 24 months, the EMI will rise further to ₹46,607.
Scenario II (You want a smaller EMI): Now suppose you can’t afford to pay a high EMI of ₹32K, and you want your instalment to be below ₹30K, the only option you would have is to increase the loan tenure. Using the same EMI calculator, you can input the loan tenure to be 40 (instead of 36), your loan EMI will drop to ₹29,975.
As an afterthought, if you want the loan EMI to drop further, you can input loan tenure to be 42. In that case, your monthly instalment would fall further to ₹28,793.
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