SBI Personal Loan EMI Calculator

Though any governmental banks or institutions are very slow processors and even with lots of ambiguities, it still encourages individuals to spend more due to sudden upsurge and fluctuating Indian economy. With the emerging propagation of species everyone wants to thrive for a better life and to fulfill this desire of humans a separate governmental body is set up all across the world in different countries and so does in India.

A personal loan is the amount of money that one borrows to use for a variety of purposes such a s any consolidated debt, home renovations, or dream wedding plan. The money that one borrows must be paid over time typically with interest. Some lenders also charge fees for personal loans.

Some personal loans even strict the ways by which a personal loan is used. For example, one may not be able to get a personal loan to pay for college tuitions, fees, or other expenses. It totally depends on the respective lender.

There is a difference between Personal loan and personal line of credit. The latter is not a lump sum amount; instead it works like credit card.

Types of Personal Loans

A personal loan can be categorized into two types: Secured and Unsecured.

Secured Loan: A secured personal loan is the one that requires some type of collateral as a condition of borrowing such as any cash assets in terms of a savings account, certificate of deposit (CD), or any physical assets such as car, boat, or any other vehicle. In case a person is found a defaulter on loan, the lender can take away the collaterals to combat with the debt.

Unsecured Loan: An unsecured loan requires no collateral to borrow money. The agreement solely depends on the lender and borrower on their own set rules and policies. Therefore banks generally consider this to be riskier.

Things to be considered while applying for any personal loan

From the borrower’s perspective, it’s necessary to pay attention to the following details before availing for any personal loan.

• Fees
• Interest rate
• Repayment terms
• Borrowing limits (minimum and maximum)
• Collateral requirements

The lenders may have different requirements when it comes to approve any loan such as credit score, income, and debt-to-income (DTI) ratio that is acceptable to be approved for a personal loan.

The debt-to-income (DTI) ratio is all the monthly debt payments divided by the gross monthly income. This number is one way lenders measure one’s ability to manage the monthly payments to repay the money one plans to borrow.

How to use SBI Personal Loan Calculator

The standardized formula for calculating any EMI is:

E = P x R x (1+R)^n / {(1+R)^n – 1}

where
‘E’ stands for EMI i.e. Equated Monthly Installment.
‘P’ = principal amount
‘R’ = interest rate on loan amount
‘n’ = tenure for repaying the loan amount

The user is required to fill in the following details as mentioned above while using the SBI Loan calculator.

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Step 1: Identify the requirement

It’s very important for the borrower to identify the main motive behind taking up the personal loan. The need of the borrower may range from wedding or birthday plan, home renovation to any domestic or foreign vacation trip.

Make sure the personal loan amount doesn’t exceed the budget constraint of the borrower. Else, the borrower needs to repay the hefty amount with much struggle later on.

Step 2: Check the eligibility criteria

It’s vital to check on the eligibility criteria of the desired loan type before settling down to take up the personal loan. By doing so, it also helps the borrower to know how much maximum amount can be taken as a personal loan depending on the factors like age, sex, income status etc.

Step 3: Calculate monthly installments

It’s quite beneficial to calculate the monthly installment (EMI) of the desired personal loan beforehand to know whether it would suit to the borrower’s current monthly income or not.

By using SBI EMI Calculator, a customer (borrower) can modify the interest rate and tenure of the personal loan matching with the current monthly income to avoid any trivial situations later on.

Step 4: Approach the bank for acknowledgement

After submitting the application online for the personal loan approval, it’s advisable to check on it separately as well by either visiting the nearest bank branch or by calling to the customer support service of the SBI bank for the confirmation and acknowledgment of the same.

Step 5: Submit the documentation appropriately

It’s advisable to read on the instructions carefully before applying for the personal loan. Take a note on all the important documents that need to be uploaded and submitted online for the loan approval.

The documents may include bank statements, income proof (salary slips), address proof (temporary or permanent). In case of pre-approved loans, the loan amount is reflected to the borrower’s account within 10 seconds while for non-SBI customers it takes about 4 hours for the loan amount to get reflected into the borrower’s account.

Benefits of SBI personal loan EMI Calculator

Though there are numerous other online personal loan calculators available in the market, SBI personal loan Calculator is easy to use showcasing the following facilities as under:

• It lets one to identify the eligibility criteria with the respective bank
• It lets one to know the monthly payment for the term opted for the personal loan.
• It lets one to find out the current interest rate of the bank and use it to get the exact EMI.
• SBI can provide offers to only direct customers in case any organization one works at has their salaried account with SBI.
• Negotiations can be also done a bit on the rate.

Drawbacks of SBI personal loan EMI Calculator

Any technology can be both a boon and bane as nothing is perfect. It’s user’s responsibility to understand all the pros and cons of any software or application before using it to know whether it suits best for your needs or not. Let’s have a look at some negative aspects of SBI personal loan Calculator:

• Approval of any personal loan application to SBI is completely at the discretion of the loan manager.
• There’s no guarantee of any fixed interest rate and it may vary as per the current trends.
• A penalty can be charged in case the loan is paid prior to its respective tenure.