When you borrow a Personal Loan, you must repay the lender in Equated Monthly instalments (EMIs). With the introduction of online eligibility and EMI Calculators, it has become much easier to calculate Personal Loan eligibility and know your EMI obligations. While an EMI Calculator tells how much you must pay each month to repay the loan, an Eligibility Calculator determines how much you can borrow based on your eligibility. Read on to learn more.

What is a Personal Loan EMI Calculator?

A Personal Loan EMI Calculator lets you calculate EMIs for your loan. It is a user-friendly, free online tool that lets you determine your loan amount and repayment tenure in advance. As a result, you can avoid financial compli- cations in the future when repaying the loan.

How Does an EMI Calculator Work?

To calculate your loan EMIs, simply enter the loan amount, interest rate, and repayment tenure. The online tool will display the EMI amount instantly with the total interest amount and loan cost. You can modify the values any number of times until you find a repayment plan suitable to your monthly budget. Here is an overview of what difference your selection can make:

A Personal Loan EMI Calculator uses the following formula to calculate the EMIs:

E = PxRx(1+R)^n/[(1+r)^n-1]

Here, E is the EMI, P is the principal amount, R is the rate of interest, and n is the number of months in the repayment period.

Benefits of Using an EMI Calculator

Manually calculating the EMIs is hectic, time-consuming, and error-prone. Hence, using an online EMI Calculator for automated calculation offers multiple benefits, including the following:

• Saves time and effort
• Easy to use
• Accurate results
• Free and convenient access
• No chance of an error
• Unlimited number of uses
• Facilitates financial planning
• Helps compare different loan plans and repayment schemes

Factors Impacting Your EMI Amount

Let’s look at the three most crucial features impacting your EMI amount:

1. Loan Amount: The loan amount you borrow largely affects your instalments. The higher the principal amount, the higher your debt burden and the bigger your EMIs. That is why you must evaluate your expenses before applying to avoid over-borrowing.
2. Interest Rate: The interest rate is the monthly interest rate you must pay with your EMIs. That means the higher the interest rate, the bigger the EMI obligations. Therefore, you must compare different loan plans and opt for one with the lowest Personal Loan interest rate.
3. Repayment Tenure: Lending institutions offer flexible repayment terms on Personal Loans. A longer loan tenure reduces the EMI amount by distributing the total loan cost into more EMIs. On the contrary, a shorter repayment term makes the EMIs heavier because you must pay the due amount in fewer instalments. Therefore, you must use a Personal Loan EMI Calculator to calculate EMIs for various loan terms and choose a tenure with budget-friendly monthly instalments.

What is a Personal Loan Eligibility Calculator?

A Personal Loan Eligibility Calculator lets you check the maximum loan amount you can borrow from a lending institution. Your loan eligibility depends on several crucial factors, including income, current debt-to-income (DTI) ratio, financial obligations, repayment capacity, credit history, etc. To calculate Personal Loan eligibility, use an online Eligibility Calculator and enter details like your city of residence, date of birth, rate of interest, total monthly income, preferred tenure, etc. Based on these details, the online tool will estimate the loan amount you are eligible to borrow.

Remember, the results of an Eligibility Calculator are only indicative. The lender will determine your actual eligibility based on various other factors, like your bank account details, financial information, employment history, work experience, etc. To calculate the eligibility, click the 'Apply' button and provide the necessary information and Personal Loan documents.

Personal Loan Eligibility Criteria

The following are some important eligibility conditions to qualify for a Personal Loan:

• Only Indian citizens residing in the country are eligible for a Personal Loan.
• The applicant should be between 21 and 58 years of age.
• Salaried applicants must have work experience of at least six months, and self-employed individuals must have been working in the same industry for at least two years.
• The borrower must earn at least Rs 15,000 each month.

Tips to Improve Your Personal Loan Eligibility

Here are a few tips to improve your Personal Loan eligibility:

• Maintain a High Credit Score: Lenders largely depend on your credit score to assess your repayment capacity. You might receive a higher loan amount with better terms and conditions if you have a strong repayment history. Therefore, maintaining a decent credit score helps you negotiate your loan rates and conditions better.
• Boost Your Income: Lenders want to ensure you can pay them back on time. A higher income means higher chances of approval with bigger loans and lower interest rates. Show multiple income sources in your application, including basic salary, rental income, investments, bonuses, etc.
• Reduce Your DTI Ratio: Ideally, your liabilities should be at most 30-40% of your monthly income. You can clear your dues or boost your income to qualify for a bigger loan.
• Opt for a Longer Tenure: A longer term significantly reduces your EMI obligations, increasing your chances of getting bigger loan sanctions. So, opt for a longer tenure to make repayments easier.
• Avoid Multiple Applications: Applying for multiple loans simultaneously pulls several hard enquiries on your credit report, projecting you as a credit-hungry, high-risk borrower. Therefore, compare various loan plans before applying to get assured approval.

If you plan to apply for a Personal Loan, take advantage of an eligibility and EMI calculator to calculate Personal Loan eligibility and EMIs. At Hero FinCorp, you can borrow a Personal Loan of up to Rs 5 Lakh for repayment terms of up to 60 months. So, do your calculations and borrow a Personal Loan to cover your planned or unplanned requirements, be it medical treatment, a child's education, home renovation, a wedding, or a foreign vacation.

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