Many individuals who require financial assistance opt for a personal loan. Being an unsecured type of loan, it gives the borrower freedom of availing a loan without pledging collateral as security. The reason behind the popularity of this loan is that the funds can be used for numerous purposes and not just for a specific need unlike a car loan or a home loan. However, you need to make sure you are applying for a loan for the right reasons. Keep in mind that these are debts that need to be repaid based on the set tenure. So, here are a few questions to ask yourself before applying for a personal loan.
1. Why do you need a Personal Loan?
This question is one of the first things you need to think about carefully. You need to carefully check whether you really need the loan or you can manage it with your personal savings. Also, check If you require financing for an upcoming event at your home or need the money to purchase a house or a car. This way you can plan the loan amount you need to apply for with the lender. Hence, it is best to think through all the aspects of your requirement before getting a loan.
2. Are you eligible for the loan?
The top reason for loan rejection is the eligibility factor of the loan. It is essential for you to look for lenders that have minimal eligibility criteria. You need to make sure you fulfil the basic eligibility criteria set by the lender for a smooth loan process. Banks and financial institutions look at the credit score, income, affordability, and depending on the value of the loan. Borrowers should find eligibility criteria of lending companies online and then proceed with the loan application.
3. Can you manage the loan repayment?
Before you apply for a loan analyze your current financial standing. It is important to consider this beforehand or else you might get in trouble later and sink in bigger debts. To avoid such situations you can take the help of loan EMI calculators available online. This will give you a fair idea of the monthly repayment based on the loan amount, duration, and the interest rate that is to be paid towards the loan.
4. What is the tenure of the loan?
Many banks and NBFCs offer flexible repayment tenure on personal loans. You need to check with the loan tenure when you apply for a loan with a lender. If you opt for a longer loan tenure the EMI amount will be less but the interest can be slightly higher. It is advisable to opt for a short loan tenure to avoid high-interest rates. However, with flexible loan tenure, you can choose the tenure of the loan based on your financial capability and make convenient loan repayments.
Loan EMI Calculator
When you think of getting a loan, the first thing that pops on your mind is the EMI (Equated Monthly Installment) amount and the rate of interest. The loan amount is repaid in EMIs and it will turn into a regular monthly outflow, this is why it is important to get an idea about the EMI amount you have to repay towards your loan. You can now get an estimate of the EMI using the Personal Loan EMI Calculator available online and it is easy-to-use. When you use the calculator, you do not need to visit the financial institution’s branch to gain insights about the personal loan EMI that you will need to pay on the loan.
How does the loan calculator work?
The loan EMI calculator is an online tool, which helps in getting an estimated EMI outflow. The calculator can also be used to plan the amount needed along with the tenure for which you require the loan. An EMI calculator for personal loan is an interest-only calculator, this means the calculator will only consider the loan amount, tenure of the loan and the interest applicable on the loan.
How to use an EMI calculator personal loan?
To use the loan EMI calculator, you can simply look up for it online. Many banks and financial institutions have EMI calculators on their website. You can provide basic details like the loan amount, tenure, and the interest rate to estimate the monthly instalment. You also have the option to make changes in the loan amount as per your convenience until you have a set personal loan EMI you can manage to pay. During the application process after you have checked with the eligibility criteria of a loan, you need to calculate your loan EMI. The EMI calculator provides an estimate based on the loan amount and tenure to help you identify the amount you require and the amount you need to repay. Overall a personal loan EMI calculator will guide you to make a well thought out borrowing decision.