If you need urgent money for financial needs such as health-related or high expenses then you get a personal loan. Most of the users prefer personal loans because they are collateral free. Which means you do not have to provide any type of asset to mortgage. But with this benefit, there is another problem for customers which is the interest rate. Because Unsecured loans attract more interest rate compared to a secured loan. And you can manage the personal loan interest rates using the EMI calculator. Read this article to know how interest rates on personal loans are managed.
Use of the EMI calculator! The easiest way to manage a loan is through a personal loan EMI calculator. Several banks in India offer this online tool to customers. With the help of this, you can generate the EMI of the loan amount. Because, it functions on a mathematical formula of [P x R x (1+R)^N]/[(1+R)^N-1]. Here in this formula, P is your borrowed amount N is the duration and R is the rate of interest. Using all this information it generates the accurate EMI which helps in setting the right repayment duration for the loan. What role does Prepayment and foreclosure play on your loan? Bank offers an option of prepayment or foreclosure to the customer so they can easily pay off the outstanding balance and save on personal loan interest rates. The burden of interest rate and loan EMIs feels heavy sometimes on the user income that is why there is an option of prepayment or foreclosure. With the help of which you can pay a pre or part pay the outstanding amount. Some banks would take a prepayment or foreclosure fee for your loans that range from 2%-4.50% of the outstanding amount. Which methods are used for loan payment? From three different types of payment methods, you can pay the personal loan EMIs that is mentioned below. Electronic Clearing Service: The payment service allows the user to pay from any of his bank account. It debits the EMI amount from your account every month, and while using ECS make sure you have enough money in the account. Otherwise, you need to pay the penalty fees for your EMI default. Standard Instruction: It is for the customers who are applying for a loan from their respective banks. Because with this feature you can make payment from your salary or saving account directly for your loan EMI. This payment method comes under the category of auto-debit and helps you make payment on time without delay or due charges. Post-dated cheque: You can also use the old method for EMI payment which is done through cheques. In this payment method, you just need to sign a dated cheque against the name of the bank from which you are borrowing a loan. Only a few of the people would prefer this method but it is still relevant for timely payment. Now, you know how much the interest rate of your personal loan matters and why is it necessary to pay the loan on time. So, whenever you apply for a personal loan from a bank, use the mentioned details to manage your persona; loan interest rate.
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12/2/2020 04:07:03 pm
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Anika Sharma
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