Mr. Srivastav earns Rs. 80,000 per month; he utilises a part of that amount to meet general expenses, such as rent, utilities, etc. Apart from that, a certain percentage of his monthly income also goes towards a savings pot. Now, after deducting the total sum, the remaining amount can be utilised to pay the loan EMIs.
Before availing a high-value personal loan for meeting any monetary requirement, it is ideal to check how much you can avail based on the funds left from your income. A personal loan affordability calculator helps you assess that within a few seconds.
Personal loans come with no end-use restrictions feature, which is why one can utilise the funds to meet any kind of financial requirements. Additionally, the unsecured nature of this credit advance also allows borrowers to obtain a large amount without having to pledge their assets as collateral.
To avoid putting a strain on your monthly budget and manage your EMI obligations smoothly, checking your loan affordability should be your first step before availing of the loan. Here are some features and advantages this financial tool comes with:
Other than these perks, a loan affordability calculator also helps in financial planning. It gives you an estimate of the exact amount you will be eligible for, how much your income should be to be able to borrow your asked amount, etc.
Note that the affordability aspect also differs from one borrower to another depending on the financial status. Based on the financial profile of borrowers, lenders offer customised offers, loan amounts, interest rates, etc. At Navi, eligible applicants can obtain a personal loan of up to Rs. 20 lakh at competitive interest rates. To avail of immediate financial assistance, download the Navi app now!
Also Read: How To Choose A Proper Personal Loan Tenure?
Before you go ahead and assess your loan affordability, you should have a clear understanding of the aspects that influence this parameter. Find the factors below:
Apart from these, the overall lifestyle, borrower’s risk appetite, etc., also play significant roles in determining loan affordability.
Now that you have a better understanding of the usage and primary aspects of a loan affordability calculator, you should know how to use it. Here are some simple steps you need to follow for that:
Step 1: Go to the online portal of the lender to find this financial tool.
Step 2: Once you are able to find the loan affordability calculator, enter the necessary values.
Step 3: Click on submit to get the result almost instantaneously.
In case you see that the amount you are eligible for does not match the amount you want to acquire, there are certain ways to change it.
Here are some ways you can improve your loan eligibility and affordability so that you are able to borrow more than what lenders are offering you at this moment:
Furthermore, you can also go for a longer repayment tenure to improve your loan eligibility and affordability. However, keep in mind that doing so will also increase your overall interest outgo. Therefore, just like using a loan affordability calculator, consider making use of an EMI calculator to evaluate your repayment capability.
Also Read: What Is Personal Loan Disbursal?
Easy access to internet technologies has made things extremely easier for the tech-savvy generation. Before making any investments or acquiring a sizable amount as a loan, individuals can assess their repayment capacity, check loan affordability, etc., using different online financial tools. A loan affordability calculator shows how much you can afford so that you do not end up obtaining more than that and find yourself in a debt trap.
Ans: You do not need to bear any charges when using a personal loan affordability calculator. Financial institutions allow loan applicants to utilise such an online tool completely free of cost. In fact, you can compute loan liabilities as many times as you want without incurring a charge.
Ans: A personal loan’s repayment tenure determines not only your EMIs but also total interest liabilities. An increase in the repayment period results in higher interest costs for the loan. However, opting for a longer tenure reduces your monthly outgo.
Ans: Lenders do not offer a personal loan to people with zero income. However, such an applicant can borrow alongside an earning co-applicant. In such a case, financial institutions will consider the co-borrower’s income before lending.
Ans: If you are using a credit card, the easiest way to build your CIBIL score is to pay off your credit card debt. Apart from this, maintaining a perfect credit mix of secured and unsecured loans can help improve your credit score.
Ans: Foreclosing a personal loan refers to clearing your dues before the loan’s tenure runs out. By doing this, you stand the chance of saving on interest costs. However, most lenders charge a fee for foreclosure, which you must consider beforehand.
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