With the rising competition in the lending world, customers have the opportunity to borrow money from lenders that best cater to their needs. However, it is essential to understand the important aspects of your loan and then make an informed decision. This is crucial in ensuring that the credit taken does not put an excessive strain on your finances and that the repayment plan fits into your budget.
Multiple factors are at play when it comes to your loan, and hence it is important to consider them all prior to making a decision. For this purpose, you can use the EMI and eligibility calculators available online. These help you better understand the loan you are eligible to get and additionally help you pick a plan that fits your price range the pleasant. Let us first recognize the 2 types of calculators and a way to use them.
Eligibility Calculator
The first step to getting a loan is to discover the quantity you want and the amount you’re eligible to get. It isn’t always precise that you will usually be offered a loan as in line with your wishes and choices. However, one way to discover in case you are eligible to get the amount you wish to borrow is by the usage of a calculator.
An eligibility calculator is a tool that essentially uses your details to determine the approximate amount you are eligible to get. It takes into account several factors like your gross income, your other liabilities, the tenure you wish to get the loan for and the desired interest rate. With these details, the tool computes the amount you are eligible to borrow along with the monthly interest you are liable to pay.
This can help narrow down your search and look for plans with the calculated principal amount. The amount computed is not completely accurate. Other factors like your employment history, creditworthiness, and so forth also determine your eligibility. However, it provides a generic outlook that you can use to your advantage when looking for a plan and planning your budget for the coming years. Applying for a loan on Aadhar card as per the eligibility computed with the calculator reduces the chances of your application being rejected.
EMI Calculator
As the competition in the financial segment keeps increasing, the number of offers available also keeps surging. So, how does one select a plan from a host of attractive deals? The answer is simple, look for the instalment plans, prior to making the ultimate decision. You may think that this is easier said than done, but that is exactly where the EMI calculator comes in.
Every individual’s budgeting tactics and monetary requirements differ from one another. Therefore, not all plans suit your financial needs. To make an informed decision, take the help of an EMI calculator. This tool takes into account the principal amount you are likely to borrow, the tentative interest rate, and your preferred tenure. With these details, it provides you with a probable repayment schedule with your monthly installments calculated for you. This enables you to get a clear idea of your payments.
You can enter details from various offers to check which one suits your needs the best. This tool makes it easy to compare and assess deals from various loan providers and choose better. It is crucial that you take into consideration not just the calculated EMI and the principal amount when applying for a loan, but also the additional expenses that come along with it. These include processing charges, application fees, prepayment fees, and so on.
Using such calculators is an effective manner to make sure that you are paying a low EMI and managing your debt nicely. Here is a list of a few other hints that you may use to lower your month-to-month installments.
Make Prepayments
During the tenure of your loan, you may find yourself in situations where you have access to a lump sum amount. These could be in the form of a performance bonus or some investment return. Even if the amount is not to repay the entire loan amount, you can still direct such funds towards closing your loan. This facility is known as part-prepayment.
With this, you can lower your interest rates or reduce the tenure of your loan. This helps reduce the strain on your finances and allows you to close your loan faster. Such payments usually come with some nominal charges which can amount to about 2% of the outstanding loan amount.
Foreclose Your Loan
Let’s say you have 3 Lakh personal loan EMI to pay. Utilize the money from your matured retirement corpus and close your debt. Similar to the part-prepayment, financial institutions allow you to shut your loan account prior to the set tenure.
This helps you save up on your interests and reduces your liabilities. The facility empowers you to get rid of the financial burden and adjust your credit utilization ratio. This may prove to be beneficial for you in getting more loans in the future.
Borrow What You Need
Having a strong financial plan is extremely important. By borrowing excessively or less than what you need, you may be spending more on EMIs than you ideally should. It is crucial that you borrow only the amount that you need. Make sure that you calculate your requirements carefully and get a loan of the amount you actually need to fulfill that need.
You can get the desired financial assistance to tackle an emergency or fulfill your dreams with a loan. However, that too requires some planning and budgeting. Use eligibility and EMI calculators to formulate your plan. Utilize the simple tricks discussed above to lower your installment amounts and enjoy the benefits of easy credit.
