Banks and NBFCs market their loan products with the attractive interest rates which they offer. They always refer to the annual interest rates. It means the interest rates offered by them will be the rate charged for a year. All financial companies are not offering the same interest rates. Here we’ll understand how this annual rate converts into the monthly installment.
The interest calculator will help us in converting the annual interest rate into a monthly interest rate so that we can come up with the monthly installment. We can use the EMI calculator to get the automatic conversion. To do the manual conversion of the annual rate into the monthly rate, divide the annual rate by 12. For example, if the interest rate is 6.75% for the loan amount then after divided by 12 the monthly interest rate will be 0.56%.
How does Interest Rate Calculator work?
We can use an interest calculator to calculate the monthly EMI for a loan. Enter the loan amount, tenor, and the rate of interest to do the calculation. You can balance the monthly budget with the awareness of the monthly EMI for the opted tenor. The formula for EMI calculation is P x R x (1+R)^N / ((1+R)^N-1). Here let’s understand it.
P stands for Principal
R stands for the rate of Interest
N stands for the tenor
We can make errors while doing the manual calculation by using the mathematical formula. It’s best to use an interest rate calculator to get easy and 100% accurate results. An interest rate calculator helps us to decide the monthly EMI based on the rate of interest and tenor. Lenders who have a good income, a high credit score, and work for a reputed company can easily negotiate with the lender for the best rate of interest. With the help of the interest rate calculator, you can easily compare the EMIs offered by different financial companies. The interest rate calculator is helpful to choose the best one.
What is a small personal loan?
Small personal loans are the type of short-term loans, advance salary, line of credit, etc. We can choose the option which is suitable for us just right from our mobile phones. The process of small personal loans is different from the traditional loans which we get from banks and financial companies. The lending process is simple and quick with easy registration and verification. If we meet the eligibility criteria the funds are transferred immediately to the bank account. We can repay the loan amount with the comfortable options chosen by us. In our country now most of banks have started providing small personal loans to fulfill the needs of the borrower. Anyone can avail of small loans from Non-Banking Financial Companies and Peer-to-Peer lenders apart from the banks.
Personal Loan Application
A personal loan application is provided by any bank, non-financial banking partner, and money lender. Loan apps are available on the google play store to download. In these apps, you can see the options of available loans, rate of interest, and tenor. You can also use the interest rate calculator.
The interest rate calculator helps us to calculate the monthly installment in an easy, quick, and accurate way before applying for any loan.