Axis Bank personal loan comes with zero foreclosure charges and competitive interest rate starting from 12%. Hence, it becomes an ideal option to avail extra cash to meet a variety of needs, ranging from a medical emergency to planning your dream vacation. But before availing any loan, you should calculate the monthly EMIs, so that your can plan your expenses ahead of time. In the following sections we will discuss Axis Bank personal loan EMI calculation method, available methods for online EMI payment and get answers to the most frequently asked questions regarding the same.
Axis Bank Personal Loan EMI Calculator
Are you thinking to apply for Axis Bank personal loan? Or, maybe you have already applied for one and want to know the monthly EMI payout. Are you wondering how the EMI calculation is made? Don’t worry! You can use the Paisabazaar personal loan EMI calculator to instantaneously know your personal loan EMI payout for free. Moreover, the EMI calculator allows you to try various combinations of loan parameters to arrive at the most suitable EMI for you.
How does an EMI Calculator Work?
EMI calculator uses 3 key parameters to automatically calculate your EMI instantaneously:
- Loan Amount: This refers to the loan amount borrowed. Generally, a higher loan amount translates into a higher EMI if the interest rate and tenure are kept constant. Axis Bank offers personal loan starting from amounts as low as Rs. 50,000 to as high as Rs. 15 lakh.
- Loan Tenure: This refers to the personal loan repayment period. The loan tenure for Axis Bank personal loan varies from 12 months to 60 months. Thus, you can choose the tenure as per your comfort. Please note that generally a longer tenure means lower EMIs.
- Interest Rate: This refers to the rate at which interest is charged on the personal loan. The interest rate for Axis Bank personal loan is linked to the bank’s 1-year MCLR and varies between 12-24%. Loan EMI usually increases with an increase in rate of interest. Moreover, the EMI amount depends on the method of interest calculation, which is discussed in the subsequent section.
The Axis Bank personal loan rate of interest also depends on the following applicant specific criteria:
- Credit score and history
- Employer’s reputation and length of employment
- Credit utilization ratio
- Monthly income
- Fixed obligation to income ratio
Personal Loan EMI Calculation Formula
The EMI payable also depends on the method of interest calculation. Let’s discuss the 2 main methods of interest calculation and how they affect the monthly EMI payout.
A. Flat Rate Method: According to this method, interest is charged on the entire loan amount initially borrowed. As a result, the EMI amount remains the same throughout the loan tenure. The formula for EMI calculation based on this method is as follows:
EMI by Flat Rate Method = (Principal + Interest)/ Loan Tenure in Months
For example: Ms. X availed a loan of Rs. 1 lakh at a flat rate of interest of 12% for a period of 36 months.
Interest for 1 year = 12% of Principal = 12% of Rs. 1 lakh = Rs. 12,000
Thus, interest for 3 years = 3 x Rs. 12,000 = Rs. 36,000
EMI = (Rs. 1 lakh + Rs. 36,000)/36 = Rs. 3,778
B. Reducing Balance Method: In this method, interest is charged only on the outstanding loan principal and not the total amount initially borrowed. Hence, this method allows you to save on the interest component of the loan. The formula for EMI calculation based on this method is as follows:
EMI by Reducing Balance Method = [P x R x (1+R)^N]/[(1+R)^(N-1)]
P = Principal loan amount
R = Rate of interest on a monthly basis = Annual interest rate/12
N = Loan repayment tenure in months
For example: Ms. Y availed a loan of Rs. 1 lakh at a reducing balance interest rate of 12% for a period of 36 months.
Monthly interest rate = Annual interest rate/12 = 12/12 = 1% per month
Monthly EMI payout = [Rs. 1 lakh x 1 x (1+1)^36 /(1+1)^(36-)] = Rs. 3,321
Axis Bank Personal Loan EMI Calculation
Axis Bank uses reducing balance method of interest rate calculation. The following table shows various possible EMIs with different combinations of loan amount, tenure and interest rate.
|Loan Specifics||EMI for 1-year loan tenure (Rs.)||EMI for 2-year loan tenure (Rs.)||EMI for 3-year loan tenure (Rs.)||EMI for 4-year loan tenure (Rs.)||EMI for 5-year loan tenure (Rs.)|
|5 lakh @ 12%||44,424||23,537||16,607||13,167||11,122|
|5 lakh @ 14%||44,894||24,006||17,089||13,663||11,634|
|5 lakh @ 16%||45,365||24,482||17,579||14,170||12,159|
|5 lakh @ 18%||45,840||24,962||18,706||14,687||12,697|
Flat Interest Rate v/s Reducing Balance Interest Method
The following examples illustrate the difference in EMIs when using the two different methods of EMI calculation:
|Loan Amount (Rs.)||Loan Tenure (months)||Interest Rate (p.a.)||EMI using Flat Rate method|
|EMI using Reducing Balance method|
How to pay Axis Personal Loan EMI?
You can pay Axis Bank personal loan EMI in following three ways:
- Standing Instruction (SI): This feature allows automatic deduction of personal loan EMIs from your Axis Bank savings/salary/current account. Fill out and submit the standing instruction request form to avail this facility. SI is the most preferable mode of payment, if you have an account with Axis Bank. It saves you from the hassle of remembering the due dates to make timely payments and thus avoid late payment charges.
- Electronic Clearing Service (ECS): If you do not have any banking relationship with Axis Bank apart from a personal loan, you can use ECS to make timely payment of your EMIs from a differentunt. This mode allows automatic deduction of the monthly payouts from your non-Axis Bank account at the end of monthly cycle. To avail this service, fill out and submit the ECS mandate form to Axis Bank.
- Post Dated Cheques (PDCs): You can also opt for post dated cheques to pay your loan EMIs from your non-Axis Bank account. To avail this facility you need to submit a fresh set of PDCs at the nearest Axis Bank Loan Centre in a timely manner. Please note that PDCs are currently collected at non-ECS locations only.
It is suggested that you opt either for standing instruction (SI) or electronic clearing service (ECS) to pay Axis Bank personal loan EMIs, as these methods are faster and less prone to error than the use of PDCs.
Charges levied on Non Payment of EMI – Cheque Bounce Charges and Penal Interest Charges
The following is a list of charges applicable to your Axis Bank personal loan in addition to interest charges:
|Repayment Instruction/ Instruction Return Charges||Rs. 500/- per instance of dishonour of cheque/SI/ECS + GST|
|Penal Interest||24% per annum, i.e., 2% per annum on the overdue EMI|
|Swap Charges (Cheque/Instrument)||Rs. 500/- per instance + GST|
|Duplicate Amortization Schedule Issuance Charges||Rs. 25-/- per instance per set + GST|
|Re-issuance of photocopy of Loan Agreement/Documents||Rs. 250/- per instance per set + GST|
|Duplicate Statement Issuance Charges||Rs. 250/- per instance per set + GST|
|Duplicate NOC||RS. 500/- per instance per set + GST|
|Stamp Duty Charges||As per Stamp Act|
*Note: Subject to change as per Axis Bank’s discretion from time to time.
Factors Affecting Axis Personal Loan EMI
Following is the list of factors affecting Axis Bank personal loan EMI:
- Loan Amount: Generally monthly EMI amount increases, as the personal loan amount increases if tenure and interest rates are keep constant. For example, if you take a personal loan of Rs. 10 lakh at 12% for a period of 5 years, your monthly payout will be Rs. 22,244. However, if you avail a loan of Rs 5 lakh at the same rate of interest and tenure, your monthly payout will be Rs. 11,122.
- Loan Tenure: As the loan repayment period increases, the monthly payout usually decreases. However, this results in a greater interest payout in total. Thus, you should always try to find a balance between a low rate of interest and tenure to suit your monthly budget. For example, if you take a loan of Rs. 5 lakh at 12% for a period of 1 year, your monthly payout will be Rs. 44,424 with a total interest payout of Rs. 33,093. However, if you take a loan for the same amount and at the same rate of interest for a period of 5 years, your monthly payout will be Rs. 11,122 with a total interest payout of Rs. 1.67 lakh.
- Interest Rate: High interest rates mostly result in high EMIs. Not only the rate, but also the method of calculation matters. You should always avail a loan that follows the reducing balance method of interest calculation and not the flat rate method. For example, a loan of Rs. 5 lakh for 5 years at 12% interest rate with reducing balance method will result in EMIs of Rs. 11,122. Whereas, the same loan with a flat rate method will result in EMIs of Rs. 13,333. Thus opting for a reducing balance interest calculation is the preferred option.
Benefits of Using EMI Calculator
Following are the major advantages of an EMI calculator:
- Better financial decisions: The calculator allows you to know your monthly EMI payouts even before applying for a loan. As a result, you can decide upon the most suitable loan amount and monthly EMI payout as per your budget.
- 24×7 Access: You can use the EMI calculator from anywhere and at any time of the day. Also, you can use it for as many times as you want for free.
- Saves time: You are saved from time-taking lengthy calculations, as the calculator displays the result instantaneously.
- Accuracy: EMI calculation involves a number of steps, which increases the chances of error upon manual calculation. Thus, you should use online EMI calculator, which always displays correct and reliable result.
Frequently Asked Questions (FAQs)
Q1. How to pay Axis Bank personal loan EMI?
You can pay Axis Bank personal loan EMI by opting for standing instruction (SI) if you have a bank account with Axis Bank, or via ECS if you have a non-Axis bank account. Alternatively, you can submit post-dated-cheques (PDCs) of your non-Axis bank account at the nearest loan center.
Q2. How to autopay personal loan EMI via Axis Bank?
Use the SI or ECS facility to auto-pay your loan EMI for Axis Bank personal loan.
Q3. Does EMI calculator also show prepayment charges?
EMI calculator only displays the EMI amount on the basis of loan amount, tenure and interest rate. You can check the prepayment charges in the loan agreement.
Q4. Can I pay the EMI in cash?
No, you cannot pay Axis Bank personal loan EMI in cash. The modes of EMI payment allowed include SI (standing instruction), ECS (electronic clearing service) and PDCs (post dated cheques).
Q5. How to use EMI calculator?
Step 1: Access Paisabazaar personal loan EMI calculator.
Step 2: Specify the loan amount, tenure and interest rate.
Step 3: Check the EMI amount instantaneously displayed in the right hand side.
This tool can be used free of charge and unlimited number of times.
Q6. How to choose the right EMI amount?
You should always choose an EMI amount as per your budget to ensure financial stability. To find the right amount, you can choose between various combinations of loan amount, tenure and interest rate using the EMI calculator.
Q7. What are the swapping charges if I change my loan repayment instrument?
Swapping charges for changing the loan repayment instrument for Axis Bank personal loan is Rs. 500 per instance of swap. Please note that it is also subject to applicable GST (currently 18%).
Q8. What is floating rate EMI calculation?
Floating rate refers to loan interest rate that depends on an external benchmark, such as repo rate. Consequently, the interest rate periodically changes as per changes in the external benchmark. When EMI is calculated using such an interest rate, it is called floating rate EMI.
Q9. What is the maximum and minimum tenure for Axis personal loan for EMI calculation?
The maximum tenure for Axis Bank personal loan is 60 months i.e. 60 EMIs, while the minimum tenure is 12 months i.e. 12 EMIs.
Q10. What are the loan limits for Axis Bank personal loan?
Personal loan offers from Axis start from Rs. 50,000 and the maximum loan amount available is Rs. 15 lakh.