A personal loan can help you in financing any unexpected or lump sum expense. You need it for the expenses of the hospital, fixing your house, paying wedding bills, or vacationing. Nevertheless, before accepting a loan, you must know the charge that is repaid every month. This amount every month is called EMI (Equated Monthly Installment). Let us learn how to calculate the 4 lakh personal loan emi.
What is an EMI?
EMI is the same amount you pay each month to return the loan. It consists of the interest as well as a portion of the original loan amount. The EMI stays the same every month. It makes it simple for you to prepare your monthly expenditures.
What Do You Require to Calculate EMI?
To know your EMI, you require three basic details:
- Loan amount
- Interest rate
- Loan duration in months or years
Let us consider an example. Suppose you avail of a loan of four lahks at an annual rate of interest of twelve per cent for three years. You will use these three factors to calculate the EMI.
EMI Formula in Simple Language
The EMI is calculated with a formula. But don’t worry about the whole maths. All you need to know is that the formula considers the loan amount, the rate of interest, and the period of the loan.
This is a basic example for you:
- The loan amount is four lakh
- The interest rate is twelve per cent annually, so one per cent every month.
- The loan period is three years, that is thirty-six months.
- The EMI of this situation will be approximately thirteen thousand three hundred per month.
Total Interest and Payment
In three years, you will be paying approximately four lakh seventy-eight thousand in all. This implies you are paying around seventy-eight thousand as interest only.
So even though the EMI may seem manageable, you pay more when the tenure of the loan is longer. If you opt for a shorter tenure, your EMI will be slightly more, but you save on interest.
How a Quick Cash Loan App Can Help
A quick cash loan app program makes it easy to calculate your EMI. You simply have to fill in the loan amount, rate of interest, and the tenor. The program displays the EMI immediately. You can also adjust the tenor and observe how the EMI is modified. This aids you in selecting the most appropriate loan scheme for your purpose.
But always verify the details correctly. Even a small variation in interest or time can make a significant difference in your EMI.
Things to Keep in Mind Before Taking a Loan
- Verify the rate of interest—a small rate increase can hike your EMI.
- Choose the right loan duration—a longer duration reduces EMI but raises interest.
- Check for additional charges—some lenders have charges like processing charges.
- Use an EMI calculator—it helps plan your monthly expenses better.
A four lakh personal loan can come in handy when you require more money. But you should have an idea about how much you will be paying each month. Use a cash loan app or online EMI calculator to find out clearly.
Always read the terms carefully. Look at the total cost, not only the EMI. In this way, you will be able to plan better and avoid money tension later. Wise planning today can make you tension-free tomorrow.
