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The personal loan outstanding surpassed Rs.62,800 crore back in April 2020, the Reserve Bank of India revealed.
- NPA is forecasted to grow at 10% to 11% by March 2022.
- Loan delinquencies for overall NBFC are expected to rise by 50-250 basis points in FY20-FY21.
The shooting NPAs in the personal loan segment not only slow down the economy but also affect the borrower’s credit profile to a great extent.
Therefore, it is time that borrowers should plan their repayment even before applying for credit. In this regard, they can consider using a personal loan interest calculator that simplifies the process and initiates a hassle-free repayment.
How to use a personal loan interest calculator
As one can infer, a personal loan interest calculator allows the borrowers to check the total interest payable during the tenure beforehand. Besides the interest component, this online tool also helps to calculate personal loan EMIs.
Individuals can check these details by following these steps –
- Visit the official website of your preferred lender and navigate to online personal interest calculator tab.
- Enter the loan amount, the interest rate offered to you and tenure. The results will appear instantly after sharing in such details.
It contains the EMI payables, interest amount and the total cost of borrowing. Thus, taking aid of this financial tool, individuals can ensure timely repayment of the personal loan and help planning their finances efficiently.
For instance, you want to apply for a loan amount of Rs.20 lakh at an interest rate of 14% for the tenure of 36 months. In such a case, your interest amount would be Rs.4,64,290 that you can check instantly using this tool.
Besides this, individuals can use a personal loan calculator for additional facilities as well.
Advantages of using an interest calculator for a personal loan
Following are some of the benefits of using a personal loan interest calculator that prospective borrowers can use for infinite times and check the loan EMI on the go.
Calculating the interest rate and EMI payables, manually using the traditional formula consume a lot of time. Therefore, a personal loan interest calculator helps save time by providing the insights of the amount payable while servicing the loan.
Along with that, individuals can also check personal loan eligibility by using a dedicated calculator for the same.
Better repayment planning
Another great advantage of using an online personal loan interest calculator is that borrowers can better plan their liabilities beforehand. It reduces the chances of default to a significant extent.
- National Data Corporation report shows an increased bounce rate of 41% on auto-debit on NACH platform in the current financial year.
With a financial tool at place, borrowers can mitigate such issues and help to plan personal loan EMI repayment better.
Although one can calculate the EMI and interest of a personal loan using the formula that follows
E = P * r * (1+r) ^n / ((1+r) ^n-1)
The risk of erroneous calculation is there, and it intensifies if the loan amount is higher up to Rs.25 lakh. Therefore, using this online tool one can ascertain a 100% accurate result instantly.
Selected reputed financial institutions like Bajaj Finserv also offer personal loan EMI calculator that shows the interest component effectively.
This NBFC also provides pre-approved personal loan offers that expedite loan processing further. Such offers are available on a range of financial products like personal loans, business loans, credit cards and many more. You can check your pre-approved offer simply by entering your name and contact details.
Therefore, with the help of a personal loan interest calculator, individuals can skip the amortisation schedule as well that includes the periodic table of payments that borrowers need to pay until the tenure ends. While a personal loan helps address any short-term, emergency financial requirements, this financial tool maximises the benefits of availing the credit ten-fold.