Determining the EMI of personal loan sometimes feels like the most important task when applying for a loan. The best way to determine the EMI is by using the EMI calculator. The EMI calculator for personal loan is found very easily online as most of the lenders provide them on their websites. However, there are many who wonder about the functioning of the EMI calculator. One of the aspects they want to know is the EMI calculator formula while the second thing they want to know is what assumptions are taken into account.
So, let’s explore EMI calculator and ascertain the functioning and assumptions for the same
EMI Calculator for Personal Loan
The EMI calculator for personal loan primarily uses two methods to ascertain the loan: flat rate interest and reducing balance method. We will be exploring the realms of reducing balance method.
The calculation of EMI would be dependent on the loan’s principal amount (P), rate of compounded interest for your loan (R) and the loan’s tenure (N). The formula that EMI calculator online apply to give you a preliminary EMI Calculation is:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Now that we know the formula, we need to understand the assumptions that are taken into consideration during calculation by the EMI calculator for personal loan. Well, it may come as a surprise to some but the EMI calculator and EMI calculator formula both use no assumptions. So, now you are caught up on what matters during calculation of EMI and what does not.
PaySense brings EMI Calculator and Instant Loans
When applying for a loan, it is only natural to consider banks as a viable option. However, if you considered all the facts properly, you will find that availing a loan from banks does not bring you much joy. The reason is that the interest rates of the loans are not very low compared to online lenders. Secondly, the time taken by the bank to approve a loan would be too much compared to the amount that you may require. Additionally, PaySense also provides you an online EMI calculator that will provide you the insight into deciding the best EMI for you. Hence, it will help you in planning your financials properly.
Apply for Loans of upto ₹5 Lakhs easily using your phone or laptop, and pay back on low EMIs