While the process of availing a personal loan has been streamlined to a few clicks, the responsibility of servicing debt hasn't changed one bit. No matter how attractive the offer, it is your duty to borrow smartly. In order to do that, you need to have a sound repayment plan in place. Forecasting your monthly outgo accurately beforehand is the key to doing so. To this end, use the personal loan EMI calculator as it displays your EMI for different values of the principal, tenor and interest rate.

To understand how to plan repayment using a personal loan EMI calculator, read these 3 ways in which it helps.

Get a clear estimate of the cost of the loan

The cost of the loan is typically based on the interest rate offered to you by the lender. When you enter this value, along with the tenor and principal, into the personal loan EMI calculator, you get accurate figures for your EMI, the total interest payable, and the net payable amount. Accuracy of information is key to effectively planning for repayment and the EMI calculator provides error-free results. Lenders like Bajaj Finserv even provide you with a simplified pie chart that depicts the total interest payment and the principal, helping you understand your loan visually.

Understand your repayment schedule

A good online loan EMI calculator displays an amortisation table once you input variables for the principal, interest rate and tenor. This table shows you the breakup of your EMIs into principal and interest components all through the repayment tenor. The table also shows the percentage of the loan paid by the end of the year and after each EMI. This in-depth information helps you plan for repayment with greater accuracy. For instance, you can judge the effect a part-prepayment would have by noting how much of your EMI comprises interest and principal.

Pick the right loan amount and tenor

By tweaking values for the principal and tenor, you can forecast the new EMI and total interest you will need to plan for. Larger principal amounts always translate into higher EMIs and net interest payments and vice versa. The tenor, on the other hand, affects your EMI and net interest payment inversely. For instance, if your goal is to minimise your total interest outgo as much as possible, you can start decreasing the tenor until your EMI increases to a value that you can handle comfortably. Alternatively, if your goal is to minimise your EMI, you can increase the tenor until you find a result that works for you.

When borrowing an unsecured loan, a personal loan EMI calculator is a must-use as it is invaluable when planning repayment. Another great use of the calculator is that it helps you compare offerings in the market. Even a slight difference in interest rate can affect your EMIs and the total interest in a big way and by using an EMI calculator, you can easily see this.

Among the many offerings of loans in the financial marketplace, you'll find that the Bajaj Finserv Personal Loan stands out as it offers a large sanction of up to Rs.25 lakh repayable over a flexible tenor of up to 60 months at a competitive rate of interest on personal loan.

Further, you are assured of zero hidden charges. Moreover, you can also use the personal loan eligibility calculator here, which helps you understand if you qualify for the loan and gives you an idea of the potential loan amount you can access based on your income and obligations.