Smart Ways to Calculate EMI on Personal Loan
31 Oct 2022
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Before you apply for a Personal Loan, you may want to get down to the basics, to shop for the best offers on personal loans in the market and also know the ways to calculate the EMI on your loan. Among the most popular ones is the Bank of Baroda Personal loan which apart from having the pedigree of belonging to one of the oldest and largest Indian banks, comes replete with some amazing features like flexible repayment options, affordable EMIs (Equated Monthly Instalments) that sit easy on your pocket and sizable loan amount among others in the category of personal loans.
What is an EMI?
EMI is the monthly installment paid by the borrower towards the loan at a specified interest rate over a specified loan tenure.
Calculating The EMI On Personal Loans
The EMI calculations mainly rely on three variables-
- The Loan Term or The Tenure of The Loan
- The Loan Value
- Rate of Interest
*The rate of interest is one of the aspects that comes determined by the bank.
Calculating EMI Using The PMT Formula
This is a longer, tedious and round about approach to calculating the EMI on your personal loan. Here, you can run the PMT formula on Microsoft Excel to calculate EMI on personal loan, where
- PMT is your EMI
- NPER or number of periods is the total number of payments for the loan
- PV is the loan value or the principal
- Rate is the rate of interest/12
- The formula is
- PMT (Rate, NPER, pv)
You can keep trying the formula for various combinations and then choose the one with the lowest EMI, though this is a roundabout approach that could be prone to human error.
Online Personal Loan EMI Calculator
Or a far easier option to calculate the affordable EMI, is using, for example, Bank of Baroda’s online personal loan EMI calculator.
Here, you will find a slider on the range of each of the three basic variables on your screen- the loan amount you are likely to need, the tenure or the repayment period of the loan that suits your finances and the rate of interest.
Now, the rate of interest is what you get from the bank, while the other two aspects, i.e., the loan amount and the tenure of the personal loan are the ones you can play around with here.
When you place the cursor on a particular value of the loan term, rate of interest and loan amount, the calculator throws up a monthly payment value, which is your EMI. You can move the cursor horizontally along the range provided to pick the various values.
How To Calculate Emi For Personal Loan With Example
The formula used to calculate EMI for personal loans is:
EMI = [P x R x (1+R) ^n] / [(1+R) ^ n-1]
Where P= Principal loan amount
R= Rate of interest &
n= Number of monthly installments.
Let us assume, P= Rs. 3 lakh, R= 15 percent per annum= 15/12= 1.250 per month, N= 60 months then,
EMI = [300000*1.250/100*(1+1.250/100) ^60]/ [(1+1.250/100) ^60-1] = Rs. 7,137
Here’s How a Bank of Baroda Personal Loan EMI Calculator can Help You-
If EMI is too high
- You can pick a longer loan term or
- You can make the loan amount smaller.
If you find the EMI is affordable or even lower than ideal, then you can plan to repay faster by either
- Taking a larger loan value or
- A shorter loan term.
Ways to Repay Mortgage Loan Quickly
Are you looking for information on CIBIL score for home loans? Have you been wondering what is the minimum CIBIL score for home loans and how you can bring your credit score within that range? If so, then you’ve landed on the right page! Continue reading the article to know all there is about CIBIL score for housing loan application.
Established in 2000, the Credit Information Bureau Limited (CIBIL) is a credit information company that maintains records of individuals and organisations. A lending agency/company/bank gives out loans on the basis of the CIBIL score generated.
What is the relevance of CIBIL Score for home loan?
The CIBIL score is basically a three-digit number that ranges between 300 and 900. The higher the score, the greater are your chances of getting a home loan easily. Lenders mandatorily check your credit score to know your creditworthiness when you apply for a home loan.
Here is a quick look at how the CIBIL score impacts your home loan application:
● The CIBIL score is essentially the first impression that your lender gets of you as a borrower
● Borrowers applying for home loans with low CIBIL scores might face a harder time in getting their applications approved
● Having a good or high CIBIL score allows you to get the better interest rate
Can a good CIBIL score help you get a home loan at a lower EMI?
Having a good CIBIL score when you apply for a home loan not only makes you eligible to get one but also helps you get funding at a lower interest rate. Lower EMIs will help bring down the overall cost of your housing loan. As we all know, a home loan is long term debt that runs into decades. So, even a small reduction in interest can see you potentially save lakhs of rupees.
Thus, having a higher CIBIL score can prove to be immensely helpful for a housing loan.
What is considered to be a good CIBIL score for home loan applicants?
Generally higher CIBIL score is considered good. It increases chances of getting easy approvals and better rates of interest. Bank of Baroda requires a minimum credit score of 701 for a customer to be eligible for a home loan.
Want to know how to increase your home loan eligibility?
Here are a few tips that can enhance your chances of getting a home loan:
● Paying off existing loans:
This is the major tip which will help you increase your chances of getting your home loan sanctioned. Ensure that you are paying your existing EMIs on time regularly and there is no default. If you have a habit of using your credit card, make sure you pay off your entire card debt on a regular basis so that you don’t have to pay any interest on those expenses. In short, pay the whole balance and not just the minimum due.
● Record your variable pay:
Another way to increase your eligibility is by giving the bank proof of your variable pay apart from submitting your income documents.
● Opt for a joint home loan:
You can add your close relatives as co-applicant, while reviewing an application for a joint home loan, the lender considers the income of both the parties. Hence, a combined monthly income will appear higher and increase your chances of getting the loan value you need.
Quick tip: You can use an online tool called the Home Loan EMI Calculator to understand what your monthly payments will look like for a certain loan amount. Knowing what kind of EMIs you can expect will help you plan your finances better. This will save you from defaulting on your payments and help you keep your credit score in good standing throughout the tenure of your home loan.
Steps to check your CIBIL score online
These days, we have become accustomed to the new normal of doing as many things as possible online, from transferring money to someone to applying for cards and opening bank accounts too. In the same way you also check your CIBIL score digitally!
Simply follow these quick steps to easily check your credit score online:
Step 1 - Go to the official CIBIL website, log in and select “Know Your Score”
Step 2 - Fill up the digital form that appears and enter relevant details such as your name, date of birth, past loan history, ID proof etc.
Step 3 - After the form has been properly filled, a payment page will appear. You can choose your preferred form of payment method like debit/credit cards or net banking.
Step 4 - After successful payment you will have to answer five questions CIBIL asks about your credit history, out of which three need to be correct, in order to get your identity authenticated from CIBIL.
On approval, you will get your credit report mailed to you in the next 24 hours, and you can check your CIBIL score, also existing BOB customer can check their CIBIL score through bob World mobile banking app.
Now you can be the proud owner of your very own dream home with the easy home loan options given by Bank of Baroda. Our home loans have low interest rates, affordable processing fees, and longer tenures too. At Bank of Baroda, you can also enjoy many other benefits such as a free credit card when you apply for a home loan. Choose from our wide range of home loans including pre-approved home loan, home improvement loan, and loan takeover scheme, among others. You can check your home loan eligibility online on our website and even apply for your home loan online too. It’s that convenient!
Get in touch with us today to know more.
Why Choose Bank of Baroda Housing Loan?
There is no feeling like home. Buying a house brings unmatched joy and happiness in our lives. An owned home gives us a sense of security and a feeling of achievement. Long back, people had to spend numerous years saving up a corpus to finance their dream of buying a house. But today, you do not need to do so. You can simply take a home loan.
Opting for a home loan is an excellent way to finance the purchase of your dream house. This loan allows you to pay the property amount in a systematic and periodic manner. Bank of Baroda offers home loans at attractive interest rates on easy repayment terms. The maximum tenure of repayment is 30 years, and you can apply for a top-up for five times during this entire tenure.
Benefits of taking a home loan from Bank of Baroda
At Bank of Baroda, we truly believe in simplifying the process of getting finance for your home. As such, we offer a range of loans designed to meet your various requirements. From our pre-approved home loans to home improvement loans and home loan takeover scheme, there is something for everyone. Here are a few more benefits of getting your home loan from Bank of Baroda:
• Low interest rates and processing charges
• Higher loan amounts
• Free credit card
Let’s take a closer look at why you should consider opting for a Bank of Baroda home loan to buy your next or first flat or house. We will show you how to apply for home loan by discussing home loan eligibility, fees and charges, and documentation required in detail.
Bank of Baroda housing loan eligibility criteria
To help more people finance their dream home, we have put together an easy to meet eligibility criteria.
Signing up for a home loan is a long-term commitment. And we, at Bank of Baroda, promise to be there for you every step of the way. From helping you sail through the documentation process with ease to offering expert advice on planning your loan repayment, we have it all covered for you.
In fact, you can now apply for a housing loan with Bank of Baroda online with a matter of a few clicks. We hope this was a great read for you today.