Invariably, the first choice for a personal loan remains State Bank of India (SBI), a state-owned lender with around 25,000 branches across the country. If you are wondering as to what purposes for which SBI can offer a personal loan, it can be anything from marriage, education, buying consumer durables to even the medical emergencies. But as every good thing comes with a cost, a loan also comes with interest rate, which greatly determines the pace of repayment. And so arises the need of SBI Personal Loan Calculator that has an instant connection with the interest rates.
Knowing the calculator in and out would only help you set your loan repayment on the right track. The article would, hopefully, help you do so by explaining every single detail of the calculator.
Modus Operandi of SBI Personal Loan Calculator
The calculator determines your repayment future in a matter of few minutes. It does that with just three things – loan amount, tenure and rate of interest. Plus the fact that it is there online makes it easy for you to use and compute. The repayment future is greatly exhibited by the EMI, which is a short form of Equated Monthly Installment. The EMI carries both interest and principal payable towards a loan each month. In the initial years, interest portion would constitute more of the EMI compared to the principal. With just a year or two left for the loan to be over, the principal would start to overweigh the interest portion.
Three Tenets of SBI Personal Loan Calculator Explained
SBI Personal Loan Rates range from 10.65%-15.10% per annum. The actual rate would depend on your income, credit score, repayment potential, etc. Needless to speak of, lower the rates lower will be the EMI and vice-versa.
So, you should look to negotiate with the largest public lender on the grounds of healthy income and a greater credit score. Even if you have an existing relationship be it in the form of any deposit or loan, you can take it as a point to negotiate and get the rate reduced. On the other hand, you can get a maximum loan of ₹15 lakhs for up to 5 years.
SBI Personal Loan Amortization Calculator
It pays to know the amortization schedule in advance so as to plan your repayment better. The schedule, if you speak of, contains a record of interest and principal payment month-on-month, year-on-year till the time the loan is paid off in full. Besides interest and principal payment, the schedule also lets you know the outstanding balance of loan both on a monthly and yearly basis, keeping you in track of the repayment all the time.
Checking it in advance can thus put you in a good stead, and if the savings accumulate over time, who knows the loan would be off much before the expiry of its original tenure. You can thus invest some amount in products such as a mutual fund to get to a figure which would be sufficient to pay off the loan in 3-4 years, assuming you go for a full 5-year tenure. The interest is greatly saved by the prepayment, which means the payment of a loan before its stipulated time. There can be prepayment charges at about 2%-4% of the principal outstanding. So, see whether the charges are lower than the savings of interest or not. If so, then there’s no harm in prepaying the loan.