The EMI (Equated Monthly Instalment) allows the loan holder to enhance their purchasing power by repaying the loan monthly. This method provides the freedom to repay the loan amount to the lender in instalments and the added interest over a fixed period. The EMI calculator displayed above can swiftly calculate the monthly instalments required to repay a loan.
How to use a Loan EMI calculator?
The online loan EMI calculator assists applicants in calculating the monthly instalment payable on the loan amount. Applicants can calculate Personal Loan EMI by entering the following parameters:
- The Loan amount required
- The interest rate applicable
- The repayment tenure
After the input of the variables, the results are displayed as follows
- The monthly instalment: the amount deducted as the EMI for repayment.
- The principal amount: the amount appended as a loan.
- The interest factor: the amount paid as interest.
- The total amount paid: The loan amount issued + interest.
What is the formula for calculating your personal loan EMI?
The formula to calculate an Equated Monthly Instalment (EMI) is: EMI = [P x R x (1+R)^N] / [(1+R)^N -. In this formula:
- P: represents the principal loan amount.
- R: represents the monthly interest rate.
- N: represents the loan tenure in months.
Personal Loan EMI Calculator Example Illustrated Below:
| Personal Loan Amount |
₹ 300000 lakhs |
| Rate of Interest |
12.50% |
| Tenure |
36 months |
| EMI |
10063.39 |
What are the Key factors that influence your EMI?
The Loan Amount Required - The loan amount you need is the base for calculating the EMI payable. The loan amount approved by the bank will be based on your income and other existing obligations. It is essential to factor in your monthly expenditure and the amount payable towards existing loans and credit card expenses before finalising the loan amount.
The Rate of Interest - The interest rate is the cost of funds payable for borrowing the loan amount. The interest rate for a personal loan remains fixed for the entire tenure, whereas mortgages issued at a floating rate will fluctuate according to the Repo rate. Before applying, a credit seeker should survey the market for the best terms, such as a lower interest rate on the borrowed funds, which will directly reduce the monthly instalment.
The Repayment Tenure - The repayment tenure is the period allowed for the customer to repay the borrowed amount with interest. The assigned tenure is fixed at the time of loan disbursement, based on the applicant's repayment capacity and the bank's policy. If the applicant can manage a higher EMI, the tenure becomes shorter. Conversely, it can be extended if the applicant prefers a lower EMI.
Please review the illustration illustrating the difference in EMI due to a change in the interest rate or tenure.
| Personal Loan Amount |
Rate Of Interest |
Tenure |
EMI |
| ₹ 300000 |
12.50% |
36 months |
10063.09 |
| ₹ 300000 |
12.50% |
48 months |
7974.00 |
| ₹ 300000 |
13.50% |
36 months |
10180.59 |
What are the Benefits of an EMI calculator?
A Suitable EMI - Using an EMI calculator, the applicant can determine a manageable EMI. Before applying for credit, whether for a personal loan, mortgage, or auto loan, the customer should understand the EMI payable, as it will directly impact their monthly budget. Therefore, the applicant should ensure that this amount can be easily accommodated within their essential expenses and other expenditure.
Know the Total Cost of Funds - The total of EMI payments over the designated tenure will provide the applicant with the overall amount repaid on the loan (principal amount + interest). The interest for a loan is applied annually; therefore, if the applicant can afford a higher EMI, opting for a shorter tenure will reduce the cost of funds, and vice versa.
Check as per the illustration below:
| Personal Loan Amount |
Rate of Interest |
Tenure |
EMI |
Total Amount Repaid |
| ₹ 300000 |
12.50% |
36 months |
10063.09 |
362268 |
| ₹ 300000 |
12.50% |
48 months |
7974.00 |
382752 |
Help to maintain your CIBIL score: Knowing your EMI in advance will help to avoid shortfalls and delayed payments. A return of the EMI as unpaid or a delayed payment will directly affect your CIBIL score. Checking your EMI in advance will ensure smooth repayments and avoid any issues with your repayment schedule.
Use of the EMI calculator for all types of loans.
The facility for repayment of credit taken with a monthly instalment or EMI is now factored into all kinds of credit, which makes the EMI calculator an indispensable tool to check your EMI online.
EMI Calculation for Home Loans and Mortgages - The mortgage is offered at a floating rate, which implies that the interest rate is adjusted as per the fluctuations in the REPO rate of the RBI (Reserve Bank of India). With the change in the lending rate, the EMI is adjusted accordingly. Customers have a choice of changing their tenure and can look for a suitable EMI by using the EMI calculator.
EMI Calculations for an Auto Loan - Though the auto loan is a secured loan, the repayment tenure is limited to a maximum of 72 months. Therefore, the interest rate is fixed at the time of delivery, and the EMI remains constant. Customers have the choice of making a part payment against the principal and can use the EMI calculator to adjust the EMI.
EMI for Commodity Loans Taken from Merchant Outlets - To make commodities easily affordable and promote sales, a no-cost EMI is offered to customers buying home appliances and gadgets. Purchases are made with their debit and credit cards, allowing them to convert the payable amount into monthly instalments or EMI.
EMI Calculator for a Personal Loan - A personal loan is an unsecured loan with a limited tenure for personal usage. The amount of a personal loan issued is based on the customer's profile and the existing obligations. The ability to pay the monthly EMI comfortably is a significant consideration. Therefore, using the EMI calculator before applying will help to confirm eligibility for the loan amount required.
What are the advantages of a Personal loan calculator?
The online personal loan interest rate EMI calculator is frequently used to determine the applicable EMI for a personal loan, which is an unsecured credit, and is typically issued within 48 to 72 hours. Check the interest and EMI applicable for the HDFC Bank online personal loan, the ICICI Bank personal loan online, and the AXIS Bank instant personal loan using the EMI calculator. The EMI calculator will further assist you to:
Calculate Your Personal Loan Eligibility - The EMI amount payable for your personal loan should not exceed 50% to 60% of your monthly salary; other existing credits you are currently using are also considered. Using an EMI calculator, you can verify if the EMI payable for the required loan amount falls within your eligibility; if not, you may apply for a lower amount. Therefore, the EMI calculator can also serve as a personal loan eligibility calculator.
Minimise the Chances of Rejection - A personal loan provides a quick source of funds to handle emergencies and individual needs. The primary requirement for a personal loan is that the applicant must make timely repayments. Using the EMI calculator makes it easy to see whether the EMI for the personal loan is affordable. This will reassure the credit team and facilitate an approval.
Confirm the Interest Rate - The interest rate for a personal loan is calculated on a monthly reducing balance. The interest you pay annually is at a flat rate; sales pitches made by different banks can confuse customers about the difference between the two. For example, a personal loan disbursed at a reducing interest rate of 11% will be applied at a flat rate of 6% annually. Use the personal loan interest calculator to determine the EMI, which will help you understand the details of the interest charged.
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