Personal Loan Calculator: Estimate Your Payments
A personal loan is an installment loan that can help borrowers meet a wide range of goals, including consolidating debt and covering major purchases. When you take a personal loan, you will receive a lump sum which you will pay back in fixed monthly payments over the term of the loan you choose.
Personal loan rates are often lower than credit card cash advance APRs but higher than what you’d pay if you qualify for a 0% APR credit card. Along with making sure you can afford the monthly payments, it’s important to know whether a personal loan is right for you.
Use the personal loan calculator above to see how much you’ll pay each month and overall, which will help you compare your options.
How to get a personal loan
While the exact application process may vary depending on your lender, you can follow these general guidelines for applying for a personal loan:
Check your credit score.
First, check your credit score through a website that offers free scores or through your credit card provider. This will help you understand your creditworthiness and chances of qualifying. We recommend a minimum score of 610; However, a score of at least 720 will give the most favorable terms.
If necessary, take steps to improve your credit score.
If your score falls below 610 or you want to raise it to receive the most favorable terms, take the time to improve your score, such as reducing your credit utilization or paying off unpaid debt.
Determine how much you need to borrow.
Calculate how much money you want to borrow. Keep in mind, you’ll be getting your funds together and you’ll have to pay interest on the entire amount—so borrow only what you need.
Shop around for the best terms and interest rates.
Many lenders will let you prequalify before you apply, which lets you see the terms you can get without a hard credit inquiry or damage to your credit score.
Submit a formal application and wait for a loan decision. Once you find the lender that offers you the best terms, apply online or in person. Depending on the lender, this process can take anywhere from a few hours to a few days.
Pay off your loan.
Once you receive the funds, your repayment period will begin. Setting up autopay is an easy way to never miss a payment. If you decide you want to pay off your loan early, check to see if your lender charges a prepayment penalty.
What is a good interest rate on a personal loan?
A good interest rate on a loan is one that is lower than the national average, which is around 12%. However, the rate you will receive depends a lot on your credit score, income and overall creditworthiness as a potential borrower. To receive the most favorable interest rate, be sure to maintain a good-to-excellent credit score of at least 720, have a consistent income and minimize any unpaid debt.
Personal loan options
Personal loans are not suitable for everyone. If that doesn’t sound like the right financial decision for you or you don’t qualify, consider loan options that include:
- savings. You can avoid fees and interest if you are able to cover your expenses with savings. Keep in mind, withdrawing money from a qualified retirement account before the designated retirement age often involves an early withdrawal penalty. So this option should be avoided whenever possible.
- credit card. Credit cards usually have higher interest rates than loans but may be easier to qualify for if you have damaged credit. However, if you have a strong credit score, you may qualify for an interest-free loan credit card, which can save you money on interest payments.
- Personal line of credit. Unlike a personal loan, which you get as a lump sum, a line of credit allows you to access funds up to a certain limit on an as-needed basis; You will pay interest only on the amount borrowed. This makes a line of credit an excellent option for projects or events where costs will be spread over several months or years.
- A home equity loan or line of credit. Home equity lines of credit (HELOCs) and home equity loans are financing options that secure the equity in your home. If you’re considering a loan secured by your home, make sure you understand the difference between HELOCs and home equity loans.
How to use Personal Loan EMI Calculator?
The PersonalFN Personal Loan Calculator generates results in split seconds and enables you to understand if monthly payments are affordable for you.
All you need to input is:
- Personal Loan Amount (in Rs.)
- Personal Loan Interest Rate (Percent)
- Personal Loan Tenure (in months or years)
You can either use the slider or enter the loan values in the Loan Calculator table. When you change the input values, the calculator will recalculate and display the new result.
The personal loan calculator not only generates the EMI result but also tells you the total loan interest payable throughout the loan tenure. A pie-chart shows the breakdown of total interest payments and principal amount. Therefore, a personal loan calculator can help you plan your future cash out-flow
This in turn will give you a clear picture about the maximum loan.
PersonalFN believes that an individual’s EMI-to-income ratio can be around 40% of gross household income.
Use our EMI calculator to make a wise decision before taking a loan
When to take personal loan
A personal loan is an unsecured loan based on your credit history and ability to repay it from your personal income. It is also called consumer loan. Some of the reasons to apply for a loan are:
- financial education,
- medical emergencies,
- Home refinancing
- business expansion,
- Holiday/Vacation Credit
- debt consolidation,
- build/renovate a house,
- buy or fix a car; and more
This loan is repaid in the form of fixed monthly/quarterly installments during the loan tenure. Since there is no collateral there is more risk involved and hence the interest rate is usually higher compared to secured loans like home and car loans.
You repay your personal loan by making monthly installments. EMI stands for Equated Monthly Installment which is the amount that the borrower is expected to pay to the lender every month during the loan period. EMI consists of the interest cost and a portion of the principal loan amount that you have to repay. This sum of principal and interest and principal amount is divided by the loan tenure i.e. the number of months in which the loan is to be repaid. This amount is usually paid on a monthly basis.
So, before you think of opting for a personal loan, look at other financial options.
Advantages of Personal Loans
- This is a multi-purpose loan to fulfill all your aspirations
- Hassle free and fast loan approval process
- Less documentation
- The interest rate remains fixed during the loan tenure
- Tenure is flexible between 12-60 months
- No security or collateral is required
- The loan is repayable in easy monthly installments
Here is a final checklist before applying for a personal loan
- Decide the amount you want to borrow.
- Calculate how much you can afford to pay.
- Assess how long it will take to pay and how often you want to set up a repayment cycle (weekly, fortnightly or monthly.)
- Will a fixed or variable rate personal loan suit you?
- Compare personal loans online, get loans with low interest rates and low fees.
- Organize and have the necessary documents and paperwork ready to support your application.