Knowing your EMI and eligibility is important while applying for a personal loan from a lending institution. This post explains about how an online calculator can help you determine the EMI and eligibility for personal loans without much difficulty.
Personal loans can come to your rescue when you need money to take care of your sudden expenses. They are easy to avail if you have a stable income. Moreover, being aware of your eligibility and EMI can save you from the dejection of your loan application getting rejected.
Why EMI and Eligibility Calculation is Important
Instead of guessing your personal loan eligibility, it is better to have a clear idea of whether you can expect the lender to disburse the loan to you. If you have monthly commitments like payments and debts, then the portion of your income available for paying EMIs can reduce. Calculating EMI is essential because it can also inform you of the maximum loan amount you can request from the lender.
Benefits of Online Loan Calculators
Calculating EMI using formula can be a tedious process. Learning about your loan eligibility for different lenders can also be cumbersome without online tools.
Loan calculator tools you find on the portals of lending institutions can help you find your eligibility and EMI instantly. Since they do not involve any mathematical calculation from you, it is also easier to use.
Online EMI Calculator
The online EMI calculator lets you know your monthly outgo for EMI payments. The EMI you are expected to pay can depend on the following factors:
● Loan amount: The quantum of loan is a major factor that decides your EMI. If you are applying for a higher loan amount, the EMI also will be higher. Knowing your EMI can help you manage your finances and ensure you don’t default on your payments.Your repayment capacity will determine whether the lending institutions will approve your loan application. Therefore, EMI calculation can also help you judge the loan amount you may be eligible for.
● Interest Rate: Interest rates can also influence your EMI because EMI is the monthly payment in instalments of both the principal and interest. When the interest component goes up, the EMI amount increases too.
● Loan Tenure: The loan tenures for personal loans can range from 12 to 60 months. For a given loan amount, a higher tenure can result in lower EMIs. However, if you expect to have spare funds in the future, you can opt to pay higher EMIs and go for a shorter tenure to repay the loan.
The online EMI calculator allows you to adjust the above 3 factors and calculate the estimated EMI according to your chosen values. It can also give you the amount you are required to repay and the breakdown of the principal and interest component of the total amount payable.
Online Eligibility Calculator
Your loan eligibility can be dependent on several factors such as
● Monthly Income
● Other Debts
● Employment Status
● Credit Score
By inputting the name of your employer, other monthly liabilities, and your monthly income in the personal loan calculator tool, the lending institutions can inform you about your loan eligibility in a short amount of time.
Since personal loans may be required to meet urgent monetary needs, online eligibility calculators can help you in the loan application process and facilitate loan disbursal within hours. Online EMI calculator tools also can assist in financial planning to make sure you take loans that match your repayment capacity.