Personal Loan EMI Calculator: How can it help students manage their loan repayments? | Mint
Source: Live Mint
Many students finance their studies through loans since the costs of higher education have skyrocketed. It can be very challenging to balance student loan debt with other financial obligations, part-time employment, and coursework. In such a situation, an EMI calculator can prove to be useful.
Using an EMI calculator, the students can manage their student loan debt and produce effective budgets for themselves. So, let us look at the important role that EMI calculators play in helping out students while managing their personal loans.
What are personal loans?
You can draw some amount for debt repayment, weddings, home improvements, school fees or even unexpected spending with personal loans that are sometimes known as an unsecured loan. Personal loans are available for individuals without pledged assets since they do not require collateral when compared to other secured loans. You pay money back monthly or regularly over some fixed period from the borrowed funds together with adding interest.
What is an EMI calculator?
An EMI calculator is a simple yet effective online tool for understanding and managing loan repayments. The calculator quickly calculates the fixed monthly payment required to repay the loan within the allotted time by entering important information such as the loan amount, interest rate, and loan tenure.
A related feature of several EMI calculators is that they provide an amortisation schedule where each payment made every month will have a principal component and an interest component.
Tips for students to pay off their personal loan faster
1. Pick the best EMI plan: Major lenders offer flexi EMI plans. Choose an easily affordable repayment programme so that there is no chance of default while paying your EMIs. If you pay according to an optimum plan, you easily get relief regarding timely student debts.
2. Pay more than the minimum EMI: Try paying more than the minimum EMI, which will reduce the payback period by several folds and will save you a substantial amount of interest paid overall. It doesn’t matter whether you get a raise, bonus, or wage increase.
3. Use employer support: Many employers offer programmes to help employees manage student loan debt. Ask your employer if they have internal loan offerings or repayment support that can help you pay off student debt more quickly.
4. Consider refinancing: Consolidating or refinancing your student loans may be a good option for you if you wish to have lower interest rates. You may have options for less costly rates if you have some work experience after graduation, which may speed up the payment on your loans.
An EMI calculator eases tension associated with debt management, enables you to manage your budget effectively, and gives you the clarity that would enable you to make smart financial decisions. Always keep in mind that personal loans are not a solution for every financial problem because they consist of higher interest rates and can lead you to enter into a debt trap.
(Note: Raising a loan comes with its own risks. So, due caution is advised)
