How is Interest Calculated on a Personal Loan?

In today’s time, personal loans have emerged as one of the key financial solutions. Yes, if you want to get quick funds without too many formalities, then it is a perfect fit.

But since it is an unsecured loan, prospective borrowers are aware that it attracts a higher rate of interest.

But people with a strong cibil score, repayment history and employment record may enjoy affordable rates.

If you wanted to know how online personal loan interest rate is calculated, then this quick post is for you!

How to know your personal loan interest rate?

You can do that online these days by using the free of cost personal loan interest rate calculator. Once you enter your exact loan amount and the tenor, then the interest rate calculator will showcase the total interest paid. It also lets you know the total payment that will include the interest amount and the loan principal.

How is your personal loan interest rate calculated?

Lenders calculate your personal loan interest rate on many factors. These are your existing cibil score and history, the loan amount that you want and monthly income. Lenders may factor in some other elements as well. It is easier to calculate it using the online personal loan calculator.

If you are a low-risk borrower, then a lender may find no issues in approving your loan request at a lower rate. Yes, those who have repaid their dues on time and have not defaulted on any of them are the ideal loan candidates.

In this case, the personal loan interest rate for such borrowers will be available affordably. This way, such applicants will manage to get instant loan approval and money disbursement within 24 hours. In turn, a lower rate of interest also means paying lower EMIs.

The interest rate calculator is available on a leading lender’s site that you can use 24/7

Must Read: Know How To Calculate Interest Rate On Personal Loan