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Avoid common mistakes such as entering incorrect loan amount and tenure, overlooking processing fees and not considering prepayment alternatives while using a personal loan EMI calculator.
Personal loans can help with various expenses, ranging from unexpected medical emergencies and debt consolidation to home renovation. However, before applying for a personal loan, it is important to fully understand your Equated Monthly Instalments (EMIs), which determine your monthly repayment amount.
People often use personal loan EMI calculators online to figure out their monthly repayment obligation. These free, online tools help you plan your finances and budget better. But you need to be careful when using a personal loan monthly EMI calculator to avoid mistakes that could potentially impact your finances.
Read on to know more about some of the common mistakes people make when using these calculators and how to avoid them.
1. Entering the Wrong Loan Amount
One common mistake people often make is entering an incorrect figure into the personal loan EMI calculator. If you enter a higher amount than you plan to borrow, the calculated EMI will be more than you actually need to pay. Conversely, if you enter a lower amount, it can lead you to believe that you have enough money to comfortably manage the loan when, in fact, you may not. Always double-check the loan amount you plan to borrow and ensure it aligns with your financial needs and objectives.
2. Neglecting the Loan Duration
Sometimes, borrowers fail to recognise the importance of the loan tenure. They may choose a shorter tenure to reduce interest expenses without considering their ability to manage the increased EMI payments every month. Assess your financial situation and choose a tenure that fits with your income and expenses.
3. Overlooking Interest Rates
The interest rate is another crucial factor in calculating personal loan EMIs. Overlooking it can cause a significant difference between your estimated EMI and the real amount you have to repay. Therefore, make sure to double check the interest rate for planning your EMIs better.
4. Forgetting About Processing Fees and Other Charges
Many borrowers only concentrate on the loan amount and interest rate without paying much attention to additional charges, such as processing fee, prepayment penalty, or late payment charges. Overlooking these charges can result in an estimate that does not accurately represent the total amount you will ultimately pay. Research and include all relevant charges to set up a more precise financial plan.
5. Not Considering Prepayment Options
Some banks and financial institutions allow early repayments for personal loans without any extra charges. Check with your lender about their policies on early repayments and determine whether making additional payments to shorten the loan tenure makes good financial sense for you.
Use the IndusInd Bank Personal Loan EMI Calculator
One of the most recommended options for those looking for a personal loan with favourable terms, including attractive interest rate and flexible tenure, is IndusInd Bank. What’s more, the free and easy-to-use EMI calculator makes it even easier to navigate your financial journey.
To conclude, a personal loan monthly EMI calculator is a useful tool for calculating your monthly instalment payments. By entering key details such as the loan amount, interest rate and tenure, you can instantly determine your EMIs. This insight empowers you to choose the loan amount and tenure that best aligns with your financial capabilities.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
