We all face a sudden need for cash at some time or the other in our lives. This is when a personal loan can help you out. It is a kind of unsecured loan in which you can borrow from any bank or any other financial organization in case you need cash. This is a quick way to get some money. You will be handed over the cash as soon as your application gets approved. There are 5 types of personal loans. Let us get into a detailed discussion of the models and Personal Loan Calculator.
Secured Loan:
In a secured loan you will have to put up any asset of yours as security. Only this way you can get a secured personal loan. The asset can be your car, jewelry or house. Keeping any asset as the security means that the lender can take possession of your asset in case you fail to repay the amount you have borrowed. In this kind o loan, the interest is quite low.
- Advantages
- You can quickly get a personal loan from a renowned lender.
- As the lender has less risk, you will, in return, enjoy lower interest rates and fees.
- Disadvantages
- The only problem is that if you ever fail to repay any amount, the bank can sell the asset or any part of it to recover the amount.
Read More – Business Loan Calculator and Elements of Business Loans
Unsecured Loan:
This loan does not require you to keep any of your assets as safety. This is an excellent option if you do not have any asset to hold as security. In an unsecured loan, you might have to convince the lender to lend you money and that you can make the repayments on time. You can provide the lender with the pay-slips of your income. You can also get a guarantor who will help you in getting the loan.
- Advantages
- The best option in case you do not have any asset.
- You can get a lower interest rate.
- Disadvantages
- The lender can take a legal step in case you fail to repay the amount.
- Fee penalty for late payment is high.
- The interest rate is high than the secured loan.
Student Loan:
Many students are under the financial burden while they are pursuing higher studies. Many banks and other lending organization offers financial aid in the form of student loan. You can buy books or laptop with this loan. This loan takes off the tension of an extra income while studying.
- Advantages
- You defer the student loan for five years at least.
- Many banks do not have an upfront fee for this loan.
- Disadvantages
- The interest applies from the day you take the loan; thus, the rate starts to get high.
Overdraft or Line of Credit:
This kind of loan is best for any emergency incident. This loan lets you overdraw the account to a pre-agreed amount which will be established by the bank. You will only have to pay interest for the amount you will use not on the maximum you were about to borrow.
- Advantages
- You will have the extra cash in a hard time and that too 24/7.
- Interest will only be implied on the amount you use.
- Disadvantages
- In comparison with any other loan, the interest rates are higher in this one.
Read More – EMI Calculator and Know More About How EMI Works!
How to Calculate EMI of Personal Loan?
This is a calculator that helps you calculate your EMI. With the help of the principal, rate of interest and tenor, you can calculate the EMI. The formula to calculate the EMI is [P x R x (1+R)^N] / [(1+R)^N-1]. Here, P is the principal, R is the rate of interest and N is the tenure of the loan.
The EMI Calculator can only be used to calculate the EMI for Personal Loans. The EMI calculator will ask for the loan amount, interest rate and the tenure of the loan.
Benefits of using Personal Loan EMI Calculator:
You can use the EMI calculator to plan. With this calculator, you can assess the repayment of the amount, as the calculator will show you the EMI that you would have to pay the bank. The benefits of using a personal loan EMI calculator are as follows :
- It saves you from any tedious calculation.
You can even use a spreadsheet to calculate your EMI. But it can be a lot of hassle which is not accustomed to spreadsheets. But, with an EMI calculator, you can calculate your loan in a very easy way. You can now get rid of tedious and manual calculations.
- It helps you to calculate the EMI in seconds.
A personal loan calculator will help you know the amount you have to pay as EMI to the lender. You can calculate this amount in a few seconds.
- Helps you evaluate the repayment capacity and also helps to plan the finances well.
You can automatically see the amount of EMIs you have to pay to the bank as you put in the loan tenure, loan amount and interest. With this calculator, you can quickly determine whether you will be able to repay the amount every month. This calculator will quickly determine how much money you have to save from your monthly income to pay the EMI.
- It also helps you by displaying the best offers regarding personal loans.
Once you have calculated the amount you have to pay every month, then you can click on the ‘Get Quotes’ which will get you to another page where you can check whether you are eligible for the loan.
Best Personal Loans in India Based Upon Interest Rates:
Here are some of the best personal loans available in India, and their interest rates –
- SBI – 12.05%
- ICICI – 11.25%
- HDFC – 10.75%
- Yes Bank – 10.75%
- Citibank – 10.50%
- Kotak Mahindra Bank – 10.99%
- Axis Bank – 15.75%
With an EMI calculator, it is much easier to calculate the EMI rate per month. If you are thinking of getting a personal loan, it is better you calculate the EMI amount, check eligibility and then make the right choice.
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