Value was either too large or too small for an Int16. Personal Loan Calculator –Online Interest Calculator by PersonalFN

Personal Loan Calculator

Planning to take a loan? Use this simple EMI calculator to estimate the monthly instalment payable. Simply provide the loan amount, the loan tenure and the interest rate of the loan and the calculator will work out the loan Equated Monthly Instalment (EMI). The interest rate considered is on a reducing basis. You can use this calculator to calculate the EMI of any loan be it—personal loans, car loans, two wheeler loans, home loans, consumer loans etc.


Personal Loan Amount: Rs.

Interest rate: %p.a.

Loan Tenure: Months


Total Payable Amount:

Principal Amount:

Interest Amount:

Loan Emi:

Rs.

Rs.

Rs.

Rs.

Who is eligible for a Personal Loan?

A salaried individual, self-employed——whether in business or profession——are eligible to apply for a Personal Loan. You need to be between 21 to 60 years of age with a certain monthly net income criteria set by the lender.

Personal Loan is an ‘unsecured loan’, and banks conduct a thorough due diligence. They check your financial stability. This means that salaried individuals need to have a minimum two years of total work experience, while self-employed a total of five years.

Moreover, the location you reside in, be it urban,semi-urban,rural area, pin code; type of residence (whether on rent, family-owned, or self-owned); and the number of years you’ve lived there are determining factors for a Personal Loan. 

Banks will scrutinize your credit report; consider the credit score to judge your credit worthiness. Higher the credit score (of 750 and above), the better it is for you. As mentioned before, it can give you the power to bargain on the interest rate of the Personal Loan (which can reduce your EMI (or Equated Monthly Instalment) and/or ensure that your processing fee will be the least or even waived-off for a Personal Loan.

Now as for the documentation, the bank decides the Personal Loan eligibility along with disbursal once they’ve conducted due diligence on the following documents:

  • Income statements
  • Salary slips and Form 16
  • Bank statements
  • Latest Income-Tax Returns
  • Credit report
  • Age proof (birth certificate, passport, Aadhaar card, voter id, PAN card etc.)
  • Address proof (Aadhaar card, passport, electricity bill, telephone bill, ration card, etc.)
  • Photo identification proof (Aadhaar card, voter id, PAN card, passport, driving license, etc.)

These documents need to be submitted with the Personal Loan application form along with two photographs. Once the Personal Loan is sanctioned, before disbursement, the loan agreement copy will be duly signed and a standing instruction request / ECS mandate form and security deposit cheques are to be provided.

Here are factors one should carefully while availing a Personal Loan…

  1. Interest rate:
  2. When you take a Personal Loan, the interest outgo is one of the vital deciding factors. The interest rate you pay depends on a variety of factors: your age, income stability, whether salaried or self-employed, number of years of work experience (in the current job/business/profession) and total), your credit score, existing EMIs (if any), and your repayment capacity, loan tenure, among other things. The interest outgo determines your EMI and has a bearing on your budget and long-term financial wellbeing. So, make sure you’re availing a Personal Loan at a competitive rate of interest. It makes sense to compare interest rates across lenders.

  3. Loan Tenure:
  4. The maximum tenure for a Personal Loan is usually 5 years. But the shorter the tenure of a Personal Loan, the better it is.

    Loan amount (Rs)

    Interest rate

    Term of the loan (years)

    EMI (Rs) (rounded off)

    Total cash outflow (Rs)

    15,00,000

    15%

    1

    1,35,387

    16,24,644

    2

    72,730

    17,45,520

    3

    51,998

    18,71,928

    4

    41,746

    20,03,808

    5

    35,685

    21,41,100

    (Note: The above table is for illustration purpose only)
    (Source: PersonalFN Research)

    A higher tenure can reduce your EMIs, making repayments comfortable, while opting for a lower tenure (of say 2 to 3 years) increases your EMI; you pay a higher interest cost on the Personal Loan.

     

  5. Processing fee & other charges:
  6. Taking a Personal Loan does not end with interest rates; there are processing fees and other charges levied by lenders. The processing fee is a one-time fee charged as a certain per cent of the Personal Loan amount, but subject to a minimum amount. It varies from lender to lender. A higher processing fee impacts your total cash outflow while availing a Personal Loan.

    The other charges include: stamp duty (as per the Stamp Act), default interest rate on the overdue instalment, late payment fee, cheque bounce charges, duplicate interest certificate issuance charge, duplicate statement issuance charge, duplicate amortization schedule charge, issuance charge for photocopy of loan agreement/documents, prepayment charges (also known as foreclosure charges) and so on, all of which these should be examined carefully.

  7. Repayment flexibility:
  8. Apart from the above crucial aspects, assess if the lender provides you with the flexibility to repay your loan sooner, and at what will this cost you. This flexibility can help you prepay the loan ahead of time, as well as provide a relief in distressing times. However, it’s best to adopt financial discipline in order to repay the Personal Loan on time and maintain your financial health in the pink always.

  9. Customer service:
  10. When you avail a Personal Loan in times of need, you wouldn’t want it to be an unpleasant experience, do you? Hence, ensure the customer service at the lender has high standards. This service can even help keep track of your loan, allow you to be in better control of your personal finances.

    Remember, while lenders will have varying customer service standards, there are some basics of good service that are universal.

  11. Terms & conditions:
  12. Make sure you read the terms &condition carefully to make an informed choice. This will avoid issues later and ensure a pleasant, hassle-free experience.

Finally, here are some points of prudence to consider while availing a Personal Loan:

  • Consider your needs and not the eligibility – While you could utilize a Personal Loan for almost anything and your eligibility is high, consider your needs and not the eligibility. Such an approach doesn’t overburden and take a toll on your financial wellbeing. Hence, when deciding on the amount of Personal Loan, understand your monthly cash flows (cash inflow and outflow) by prudently drawing up a budget. This is a good time to be realistic with yourself, because nobody else knows your repayment capacity better than you. The objective is not to go overboard which can potentially jeopardise other long-term financial goals such as your retirement. Ideally, your monthly debt commitment should not exceed 40% of your gross income.
  •  

  • Keep your family in the loop – When you’re planning to avail a Personal Loan, make sure you discuss it with your family. Sharing your rationale with them will keep them well-informed and their opinions will help you gain a better perspective. And to your surprise, in times of a short-term cash crunch, they may even come to your rescue. Whatever be the case, keeping your family in the dark may not be in their best interest.
  •  

  • Be organised in your documentation – Once you’ve decided on the personal loan amount you require, organise your documentation and other paper work well, so that your personal loan application can be processed faster without going back-and-forth.
  •  

  • Have a repayment plan in place – Missing to pay EMIs on Personal Loan can cost you more, owing to a higher interest on default, penalty, late fees, and other related charges. Therefore, ascertain the loan repayment schedule and have a repayment plan in place. Study your income flow and make sure it is consistent (and possibly growing). Account for emergencies, as life isn’t certain. The only way to mitigate risk is to have a contingency plan in place.
  •  

  • Ensure you hold adequate insurance – As a bread winner, while you endeavour to do the best for your family vide Personal Loans, insure yourself optimally. God forbid, in case of an untoward incidence, the insurance money can cushion your family members with financial security and pay for the outstanding Personal Loan dues.
  • Now that you’re aware of all the facets to look at before opting for personal loan, go ahead and make an informed decision.

PersonalFN is not providing any investment advice through this service PersonalFN does not warrant that this service is complete, accurate, reliable, current, reliable, suitable, free from any virus, disruption or interruption and expressly disclaims all warranties and conditions of any kind, whether express or implied. The results may be based on certain assumptions. PersonalFN shall not be responsible for any direct / indirect loss or liability incurred by the user as a consequence of him or any other person on his behalf taking any investment decisions based on the contents and information, analysis, etc provided in this section of the website or due to his inability to use this section of the website for any reason beyond the control of PersonalFN provided herein. Use of this information is at the user's own risk. The User is requested to refer to the detailed terms of Use before using this service.

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