October 4, 2022 2:12 pm
interest

When an individual opts for a financial product, one of the essential components is calculating the interest amount against the availed loan. Calculating monthly interest is crucial as it helps borrowers calculate their liabilities and assess financial capabilities beforehand to restrict repayment burden. 

Individuals can use a Bajaj Finserv EMI Calculator to compute their monthly interest and total borrowing costs. 

How to calculate monthly interest online?

It is wise to calculate the interest component before applying for any loan. The EMI calculator is a simple, user-friendly tool. The interest calculation determining EMIs depends on a specific formula. Individuals can find this beneficial online tool on the official Bajaj Finserv website. 

Following are the steps to calculate monthly interest using an EMI calculator-

Step 1: Input the principal amount

Step 2: Enter the applicable interest rate

Step 3: Lastly, enter the repayment tenor

After inputting these factors, one needs to click on the “Calculate” option to acquire all the essential information about EMI, total loan cost and more. One can adjust the tenor based on their requirements to reach a suitable EMI that meets their requirements. Further, by using this calculator, individuals will also know how to calculate personal loan EMIs.

How to calculate monthly interest manually?

One can calculate monthly interest manually, using this specific formula illustrated below:

EMI= P x R x (1+R) ^ N / {(1+R) ^ N-1

Here, P refers to the principal amount, R denotes the applicable interest rate, and N signifies repayment tenor in months.

Example- Suppose an individual avails a personal loan of Rs.20,00,000 for a tenor of 5 years. The applied interest rate is fixed at 14%. In such cases, the three essential factors would be-

P – Rs.20,00,000

R- 14%

N- 60 months

Therefore EMI = 20,00,000 x 14 x (1+14) ^ 60 / {(1+14) ^ 60 -1}

The result is Rs.46,537

But this manual calculation is a lengthy process involving complicated computations. Also, it leaves room for errors. Therefore, to know the ways to get the best personal loan rate, individuals can use an EMI calculator to pre-determine the monthly interest amount and choose a lender offering the lowest personal interest rate.

By using this online calculator, one can easily compute EMIs and plan repayment efficiently.

However, the offered interest rate for an instant personal loan for salaried varies due to various factors, such as income status, employment status, credit score, etc.

Individuals can also avail lowest interest rate on a personal loan by meeting the eligibility criteria successfully. Moreover, they can also conduct in-depth research regarding financial lenders in the market to avail the best interest rate.

Benefits of using an online EMI calculator

Before applying for any financial product, individuals must use this calculator to avoid financial distress in the long run. Some benefits of using this calculator, besides knowing the exact monthly interest amount are:

  • Time-saving and displaying accurate results

By using this calculator, individuals can solve complex calculations within seconds, which saves substantial time. There are possible errors when calculations are done manually, but with this calculator, there are no chances, and one can get exact results.

  • Easy to access and use

This calculator is available online, and it is quite flexible to use. All you need to do is enter the principal amount, tenor and interest rate to determine the EMIs that needs to be paid. This makes it convenient for borrowers to calculate monthly instalments anywhere and at any time. 

  • Help to maintain a healthy credit profile

If an individual calculates personal loan EMI beforehand, it will help them manage their repayment within the given time. One can avoid EMI default, and thereby maintain his/her credit profile.

Thus, if individuals are willing to avail a personal loan, they can efficiently use this calculator to derive exact results.

Reputed financial lenders like Bajaj Finserv provide this online EMI calculator for free. Moreover, they also provide pre-approved offers on a wide range of secured and unsecured financial products, such as business loans, personal loans, credit cards, etc. Prospective borrowers can check their pre-approved offers by submitting their essential credentials.

Thus, by using this calculator, individuals can find their monthly interest amounts and thereby plan finances accordingly.