Personal loans are a better alternative than borrowing money from friends/relatives during any cash crunch. This is because, unlike other loans, banks/NBFCs don’t monitor utilization of personal loans and there is no risk of the relationship with your friend/relative being affected with defaults in repayment.
One of the most important aspects of unsecured personal loans is the interest rate which is higher than other loans and it differs for every applicant and lender.
Interest paid through the EMI is determined by:
Amount Borrowed as Personal Loan:
Interest is calculated on the basis of the amount borrowed and the loan tenure. When you borrow a large sum for a short tenure, interest payable is higher. Likewise, when the tenure is longer, the amount you pay as EMI becomes less.
Your lender will decide how much EMI you pay every month based on the tenure of the loan.
Calculating Your EMI
It is best to calculate your EMI using the online personal loan calculator on the website of the chosen lender which requires the loan amount and tenure. Doing so ensures that you are using the right interest rate for your case. With an accurate EMI estimate for your personal loan, you will be able to pre-plan and manage your monthly finances better.
Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.