Know the Importance of Loan Payment and How You Can Calculate It - Loan Trivia


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Friday 22 July 2022

Know the Importance of Loan Payment and How You Can Calculate It

One should understand the type of loan they will receive as it will affect the ultimate repayment

The loan sector in India has grown several times in the last two decades. Either for buying a home, buying a car or an electronic appliance, a loan is available in the market. Today, availing of a loan in times of a financial crisis is a big support. It the vital to being noted that any default in loan repayment can badly affect your credit score. Thus, it is imperative to repay the loan on time.


To relieve the strain of persons desiring to obtain a loan, top lenders have simplified the process. They offer quick and easy online loan EMI repayment options for you. A strong loan payment scheduling is an essential part of any borrowing. Various NBFCs offer online personal loan calculators to calculate the repayment planning structure.

Personal Loan 

A loan is provided to an individual by a bank or NBFC without asking you to produce any security or collateral. Hence, it is known as an unsecured loan. You can utilize the loan amount for any legal purpose of your choice.

Advantages of a Personal Loan

The flexibility of purpose: You can use a Personal Loan for any purpose, such as a family wedding, children’s education, home renovation, going on a holiday to pay off previous debt, or for a medical emergency.

For Instant funds

  1. No documentation is insisted for pre-approved customers
  2. Collateral or security not required 
  3. Tenures are flexible and accommodative EMIs 
  4. Interest rates are competitive

Personal Loan for salaried employees 

Almost all salaried individuals are entitled to quick loans. Though, your bank may have a pre-requisite to have an assured minimum income level. The second condition is that banks may ask for all loans to be repaid before the salaried employee retires. 

Quantum of Personal Loan

The amount of the loan depends on your salary, the company you work for, and the number of years you have served. It also depends on other debts you are holding and, most important, is your CIBIL score rating. 

Tenure of a Personal Loan 

  1. Many lenders extend Personal Loans for tenures of 12 to 60 months. 
  2. How to apply for a Personal Loan?

You can apply for a Personal Loan online with your bankers or with any NBFC. You need to fill up a loan application form and append the required documents. 

Documents required

  1. Copies of your identity, 
  2. Address proof
  3. Date of birth proof,
  4. Income proof, 
  5. Recent bank statements 
  6. Recent salary slips
  7. Company appointment letter, 
  8. Income tax returns. 

Loan Repayment

Loan repayment is repaying the loan amount to the lender/loan provided within the agreed time in the form of EMI

Calculation of loan EMI

Use loan EMI calculators available online on various websites, just put in the loan details and instantly you get the result. 

Some tips to pay off a loan faster

  1. Whenever you can, make part-payment
  2. Make the down payment larger
  3. Make the repayment period shorter
  4. If you have enough funds, foreclose your loan 

Loan repayment calculation

If you are applying for an instant loan and want to calculate the repayment, you need to input the following factors in the online personal loan calculator:

  1. Principal amount
  2. Repayment tenor
  3. Interest rate

The easy-to-use calculators offered will facilitate borrowers to plan their EMI repayment successfully. The tool will present a complete picture of the loan amount, interest payable, tenor and the EMI applicable within a few seconds after entering the required factors. 

Failing to repay the loan

If for a reason, the borrower cannot repay the EMI, he might have to face legal action, collateral loss, or have to pay a penalty. The borrower’s credit score would get affected.

Repayment default could become a stumbling block for the borrowers to obtaining any credit in the future. Hence, timely repayment is vital to build improved CIBIL reports and get lesser personal loan interest.   


Whenever any person avails a loan, they are legally responsible for repaying the principal amount and the interest in the loan amount within a fixed tenor. Timely Loan Payment is a necessary factor in reducing liability. A borrower with a poor credit history is risky by any lending institution and may be deprived of any loan.

Read Also: Deciding on the Tenure of Repayment for A Personal Loan

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