Understanding personal loan EMI calculator

If you are someone who has taken a personal loan, then you must know that you will have to pay EMIs every month. In order to know how much you will have to shell out every month, you will need the help of a personal loan EMI calculator. Read on to know everything about this crucial EMI tool.

What is a personal loan EMI calculator?

In order to ascertain the monthly payable amount in the best way possible, you will have to use a personal loan calculator. This will help you find out the equated monthly instalments (EMI) you will have to pay. For calculation, you only need to put in the interest rate of your loan, loan repayment duration and loan amount.

How does a personal loan EMI calculator works?

In order to use a personal loan EMI calculator, you will need to have a clear idea regarding how it works. Initially, it might seem a bit complicated, but after using it once or twice, you will be able to use it like a pro.

• Loan amount- You will have to enter the amount of your personal loan, in the edit box or the slider, you are looking to borrow. In order to plan your finances in a better manner, make sure that your EMIs are not more than 40% of your monthly income.
• The rate of interest- This is the rate of interest that is charged on the total amount of money you have taken as your personal loan and is a monthly reducing balance.
• Duration of the loan- Then, you will have to select the period for which you want to take the personal loan. Keep in mind that the tenure of a personal loan normally ranges from one to 5 years.
• Processing fees- Every bank charge a certain amount of money as processing fee, for giving out a personal loan. Such fees generally range from 1-5% of the total loan amount.

What are the features of a personal loan EMI calculator?

A personal loan EMI calculator has several features, which makes it the best tool for calculating your EMIs. They are as following-

• Time saver- Doing calculations on an actual calculator is much faster than doing it on pen and paper. Hence, it does not just help you do your calculations accurately; it also saves you a lot of time.

• Processing fees are accountable- Basic EMI calculators generally take into account only interest rate, loan amount and loan tenure. Whereas, a personal loan calculator also takes into account your processing fees, and informs you how much EMI you will have to pay every month.

• Accurate- Personal loan EMI calculators will always provide you with the right result and there is hardly any scope for error. Even a tiny mistake can affect your EMI amount; hence make sure that you always do your calculations on a personal loan EMI calculator.

• Easy to compare- When you are scouting for a personal loan in different banks, you will come across different loan tenures and amounts. It is not possible for you to sit and calculate all the figures by hand, and the slightest error can lead to the incorrect loan amount. Hence, the best way to come up with the right answer is to use a personal loan EMI calculator.

The whole process of looking for the right personal loan can be gruelling, so make sure you use a personal loan EMI calculator and just breeze through the process.

Car loan down payment and its effects

When you decide to buy your dream car, you must be familiar with terms like car loans and car down payments. These two terms play a huge part in the whole process of buying a car and so having a good understanding about these can help make the process easier. Read on to know more about car loan down payments and their several effects.

What is car loan down payment?

The cash that is paid up front, prior to buying a car is known as a car down payment. When you choose to opt for a car loan, you will have to pay a portion of the money from your own pocket and your bank will pay the rest.

What are the various effects of a car loan down payment?

A down payment on your car loan can have several effects, which are as follows-

• Loan tenure- While purchasing an auto loan, the duration of your loan repayment will have a direct effect on your EMIs. If your loan repayment plan is more widespread over the next few years, then you will have to pay less EMI every month. On the other hand, if you have paid a large amount of money as your car’s down payment, then you will have to take a small amount as your loan. This will hike up your repayment capacity and you will pay off your car loan in no time. Additionally, the sooner you pay off your loan, lesser will be your interest. In another scenario, if you pay a large amount of money as your down payment and pay the same EMI, then you will be able to purchase a car of a higher amount.

• Car loan- Car loans and down payments are inversely proportional to each other. The higher your down payment amount, the lesser will be your loan amount. This will also help you pay off your car loan faster. Additionally, if you take a loan of a lesser amount then you will have to pay a reduced amount of money every month as instalments. Therefore, paying a huge sum of money as your down payment while buying a car makes it easier for you to take a car loan without burning a hole in your pocket.


• Interest rate- Just as the car loan down payment affects your loan duration and loan repayment, it can also affect your interest rate. Your chances of getting a loan approved highly increase when you choose to pay a large portion of the money of the car’s price up front. This is because the level of associated risk will be comparatively less. Normally, in most cases, if you take an auto loan of a higher amount, then the probability of defaulting increases. Hence, banks are more likely to reject a loan in case you have not made a less payment or zero payment up front. Another benefit of paying a big amount of money off the total price is having a good credit score.

Down payments aid you in taking a smaller car loan and repay it in a shorter span of time. This makes sure that you do not come under a lot of financial stress and get to buy the car you want.

Everything you need to know about a Recurring Deposit Calculator

A recurring deposit is one of the most common deposits, opted for by Indians. This type of investment schemes are more popular amongst the middle classes, as they are simple to obtain, does not need a huge deposit and most importantly, is affordable. Almost all major banks in the country offer recurring deposits. However, in order to understand and maximize your returns, you must have a clear idea regarding how a recurring deposit calculator works.

What is a recurring deposit calculator?

A recurring deposit calculator is used for finding out the maturity value of your respective recurring deposit. In order to calculate this, you will need to use a simple formula. You must see your monthly instalments as an individual deposit, as every deposit will earn a different amount of interest.

What is the formula for calculating the recurring deposit interest?

Keep in mind that the compound interest is included in the first quarter, and the financial quarters are the following:

• Quarter 1- April to June
• Quarter 2- July to September
• Quarter 3- October to December
• Quarter 4- January to March

Since compounding takes place once every quarter, until then you will have to use an rd calculator to calculate the simple interest. The Simple Interest formula is as follows:

I= Prt/100
I signify Interest
P signifies Principal
R signifies the interest rate applicable on an annual basis (decimal form)
T is the duration of the scheme
The formula for calculating the Recurring Deposit Interest is M =R [(1+i) n – 1]
M signifies the maturity value
R signifies the instalments made on a monthly basis
I signify the interest rate, which will be divided by 400
N signifies the total number of quarters

Take for instance; Naina has obtained a Recurring Deposit scheme for 30 months. She makes a monthly investment of 10,000 INR and the applied interest rate will be 5%. She will get 3,20,095 INR upon maturity and the interest of the maturity value will be 20,095 INR.

What is the formula for calculating the compound interest on Recurring Deposit?

The formula used on an rd calculator for calculating compound interest is as follows:

A = P (1 + r/n) ^ nt
A signifies the final amount of money obtained
P signifies the initial amount invested
‘r’ signifies the interest rate, which is calculated in decimal
‘n’ signifies the total number of times the interest has been compounded on a yearly basis
‘t’ signifies the scheme duration

For instance, Abhinav made an investment of 1,00,000 INR for tenure of 5 years, and the applicable interest rate is 8%. By utilizing the above-mentioned formula, he will have 1,50,000 lakh as his final amount.

All these formulas and technicalities might seem intimidating and confusing at times. However, in reality, it is very simple. Once you get the hang of it, you will have a better understanding of how a recurring deposit and recurring deposit calculator work.

FD calculator: how to use it

Fixed Deposits or FDs are a popular option because they are a safe way to expand your wealth. With FDs, you earn returns on your savings. Your savings compound periodically and this is how your saved money can grow.

A fixed deposit calculator is a tool that helps you track the value of your savings as they grow.

How do you use the FD calculator?

There is nothing complex about the FD calculator. You have to log into your bank account and simply follow these steps-

• Select your customer type (new customer/senior citizen etc)
• Next, you have to choose the type of FD account (cumulative/non-cumulative)
• Type the FD amount
• Type in the principal amount
• Select the tenure of the FD

The calculator will immediately generate the results- the interest amount and the total amount you will get on maturity.

How does the Fixed Deposit Calculator work?

The FD calculator works by following a simple formula, which takes into account the principal amount, the rate of interest and the tenure of the FD ( for how many years you are investing your savings).
The formula is-

 A = P (1 + r/4/100) ^ (4*n) and A = P (1 + r/25)4n

Here,

A is the maturity amount

P is the amount that you have deposited

‘r’ the rate of interest you will receive on your principal

‘n’ is the tenure

For example, suppose you are investing INR 100,000 for 3 years at 10 % interest (P = INR 100,000; n= 3 years; r= 10%). Now if you put the figures in the appropriate places in the formula, you will get INR 134,489. This is the amount you will get on maturity. If you deduct the Principal from the Amount, you will get the interest i.e. INR 134,489- INR 100,000= INR 34,489.

Monthly interest on your Fixed Deposits

If you opt for non-cumulative Fixed Deposit, you can get monthly interest on your savings. However, the frequency of withdrawal has an impact on your interest. The more often you withdraw the interest amount, the more the rate of interest is slashed.

With the fixed deposit calculator, you do not have to do the maths yourself. It is a simple and effective tool, using which you can get an accurate estimate of your savings over time.

Unemployed? Here is how to get a personal loan

A personal loan can come to your rescue at a time of financial crisis. You can apply for a personal loan for any number of reasons- for education, buying your own house or apartment, to pay off other debts or for a wedding. A personal loan can get you out of a fix. Now you have the option of online personal loan, which is another reason these loans are very popular.

Most people believe that the unemployed cannot apply for personal loans but the reality is just the opposite. Most lenders will grant loans to the unemployed. However, a bank or a financial institution will check some parameters before they approve of the loan-

• Credit history- Any lender would want to ensure that you are fastidious when it comes to making payments on time. If you have defaulted or if there are any negative reports, the lender may reject your loan application.
• Credit score- You need to have a high credit score to be given a personal loan.
• Income- You may not be employed, but you should have a steady source of income if you want a personal loan.

Your lender will want to make sure that you can pay back the amount you are borrowing. That is why the lender will look into your credit history and credit score. Moreover, your ability to repay the loan also depends on other factors like the loan amount or the rate of interest. Therefore, all these are taken into consideration when your lender reviews your loan application.

If you are unemployed, you can also apply for a personal loan through Peer-to-Peer lending companies. These companies lend you money without recourse to any financial institution. You could also consider taking a loan from Non-Banking Financial Companies. They offer loans at a sensible rate of interest.

However, even if you are unemployed, you would have to provide your lender with the following documents-

• KYC documents
• Residence proof
• Bank statement for the last six months

The fact that you are not employed will not stand in the way of you getting a loan. You should get in touch with a bank or NBFC and they can explain the process to you in details.

Credit Card vs Loan: which one to go for

What do you do when there is a cash crunch? Do you reach out for your credit card? Or do you apply for a personal loan? Both credit card and a personal loan lend you money. Which option should you go for?

To decide which is ideal for you, you need to know how the two work, and how they differ from each other.

Credit card loan
A credit card is issued by banks that allow you to carry out financial transactions. You can use it for withdrawing money and for money transfer as well.
Many banks in India grant you loans against your credit card. If you have a credit card and an excellent credit score, you can apply for a loan. No other documentation is necessary. However, your bank may need proof of eligibility. Because of the absence of red tape, it is a very easy loan to procure.

A person can opt for a bank loan against a credit card when your cash need exceeds your credit card’s withdrawal limit and you need money because of an emergency. However, a credit card loan predetermines the amount that you will be granted a loan. For example, if you need INR 2 Lakh but your credit card loan limit is INR 1.5 Lakh, your loan application will be rejected. The loan amount is transferred directly to your bank account or you get it in the form of a demand draft.

Loan against a credit card is pre-approved. That means you can get a loan anytime you need and there is no fear of your loan request being denied. Moreover, credit card loans are unsecured, i.e. you do not have to secure the loan. Until you pay back the loan in EMIs, you will not be able to use your credit card.

Personal Loan
This too is an unsecured loan. You can procure a personal loan for any purpose, be it for your medical emergency or home renovation. Anyone can apply for a personal loan. It is a comparatively more complicated process, as you have to provide the bank with documents attesting to your identity, your income, residence etc. and these loans take longer to process.

A personal bank loan charges a high rate of interest, sometimes as high as 30%. If you have not incurred many debts or if you have a good credit score, then this will push your interest rate down. The loan amount could be anything from a few thousand rupees to lakhs. There is no cap on how much you can borrow. This feature is beneficial if need a lump sum, maybe for a surgery. You have to pay the loan back in EMIs and the loan repayment tenure ranges from 1-5 years.

Both a personal loan and a credit card loan have their own specific advantages. Now you need to assess your needs and decide if you want to apply for personal loan or a credit card loan.

7 reasons why you should apply for a personal loan

Personal loans are a popular choice because they do not require collateral. They are very easy to procure because they do not require tonnes of paperwork. You could utilize a personal loan for any legitimate financial reason. Here are some common reasons why people often apply for a personal loan-

1. Debt Consolidation
You can apply for a personal loan if you already have incurred many loans.  Different loans have different interest rates. It is hard to keep track of them- calculating how much you have already paid, and the quantum that you have to pay. With a personal loan, you have the option of bringing all your outstanding balances under one umbrella. You can figure out a time frame and a payment schedule to repay all of your debts.

2. Credit card dues
When you use a credit card, your bank is actually providing the money for your transactions. That is why you are indebted to your bank. If you do not pay the dues back to your bank, your credit score will go down. You can take a personal loan to pay off your credit card dues.

3. Buy a home
You may have wanted a home of your own for ages. However, property prices are escalating by the day and so you are not being able to afford to purchase a new home. This should not come in the way of you fulfilling your dream. With personal loans, you can purchase that coveted house or apartment.

4. New amenities for your home
You might feel that your home needs new amenities. You might have to buy a new refrigerator or a television set. However, due to financial crunch, you might have to put off purchasing them. Personal loans can come to your aid in such a situation. Many banks extend personal loans that can help you the amenity that you desperately need.

5. Plan a wedding
Weddings are an expensive affair. You might save up for ages but even that might not suffice. The money you have to fork out for the clothes, the flowers, gifts for guests and the banquet or to book the venue can be quite overwhelming. Therefore, the best option to fund a grand wedding is to apply for a personal loan.

6. Education
Higher education these days costs a bomb, especially if you are aspiring to study in the best university/college abroad. Why should you give up on your dreams of pursuing your dream career because you could not afford the degree that you need to get there? You can procure a personal loan and enrol for a course in your dream university.

7. Medical emergency
If a medical emergency arises, you might have to mobilize lump sum cash in a very short time. At that particular moment, you might not be able to afford the money for hospitalization and treatment or medicines. Therefore, you can turn to your bank for a personal loan with which you can clear all your medical bills.

Many occasions arise in life when you desperately need some cash. This is when a personal loan can come to your assistance. These loans can help you in the need of an hour and are easily repayable.