Use Of Personal Loan Interest Calculator To Calculate Interest Rate - Loan Trivia


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Tuesday 10 May 2022

Use Of Personal Loan Interest Calculator To Calculate Interest Rate


The personal loan interest calculator helps the borrower get a clear picture of interest and EMIs before getting a personal loan. It helps the borrower to make the right decision about the loan amount and repayment period. The borrower can use it to estimate the monthly installment payments.

Why should anyone use it?

A personal loan can be a reliable tool for some funding sources. Various types of personal loans are there in the finance market, such as emergency loans, wedding loans, travel loans, home renovation loans, etc. You can also get pre-approved loan offers. These types of loans are unsecured. That's why interests in personal loans are higher than other loans such as car loans or home loans. Therefore, you need to know about your finances in advance.

How to use this calculator?

The calculator generates results in a fraction of a second and lets you figure out if the monthly payments will be affordable.

Also Read: Calculate your Monthly EMIs With a Personal Loan EMI Calculator

You need to input 3 basic information- 

  1. Personal loan amount

  2. Rate of interest.

  3. Tenure.

You can use the slider or write the loan amount in the personal loan calculator table. The recalculated result will reflect on the display when you change the input value.

It can calculate- 

  • The EMI of your loan.

  • The total interest is payable over the entire loan term.

A pie chart is there that shows the total payment of interest and the division of the principal amount. So this EMI calculator for personal loan can help you plan your future cash outflow. So it will become easy for you to decide how much you want to borrow. 

The Formula To Calculate Interest Rate On Personal Loan:

When you visit a financial institution for a personal loan, the information you are looking for is the interest rate. The interest rate is an annual rate. First, you need to convert the annual rate into the monthly rate. The following formula is appropriate to do this calculation.

Monthly interest rate = Interest rate/12

For example, if the annual interest rate is 24%. 

Then the monthly interest rate = 24/12 = 2%

This means that the monthly interest rate is 2%.

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