ICICI Personal Loan EMI Calculator 2020

ICICI Bank offers personal loans up to Rs. 20 lakh to both salaried professionals and self-employed individuals. Based on the specifics of your personal loan, you can use the personal loan EMI calculator to know how much EMI you have paid for your loan which can help you plan your finances better. This helps you assess the cost of the loan and choose a loan amount as well as tenure according to your repayment ability. This article discusses the key features of ICICI bank personal loan EMI including its method of calculation, factors affecting the EMI amount, EMI payment options, late payment charges, etc.

ICICI Bank Personal Loan EMI Calculator

EMIs refer to the Equated Monthly Installments that need to be paid by a borrower in order to repay a loan taken from a bank or a non-banking financial company (NBFC). ICICI Bank’s personal loan EMI calculator is an easy to use online tool that lets you compute the cost of a loan before actually applying for it so that you can manage your finances in a better way. You can also use Paisabazaar’s personal loan EMI calculator to check your loan EMIs instantly and for free, instead of opting for a bank specific calculator. EMI can be computed using just three criteria – loan principal, tenure and interest rate. Various combinations of these loan parameters can be used to arrive at the most suitable EMIs for yourself.

How an EMI Calculator Functions?

An EMI calculator functions on the basis of the following 3 parameters:

• Loan Amount: It refers to the principal amount borrowed from ICICI Bank. Usually, a higher loan amount results in higher EMI. ICICI Bank offers personal loans ranging between Rs. 50,000 to Rs. 20 lakh.
• Loan Tenure: It is the duration over which a loan can be repaid. In case of ICICI bank personal loans, the tenure currently ranges between 12 to 60 months. A shorter tenure usually leads to higher EMIs, but helps you save on the total interest payout of the loan.
• Interest Rate: It refers to the rate at which interest is charged on the loan amount. ICICI bank personal loan interest rate starts as low as 11.25% p.a. A higher rate of interest usually results in higher EMI payouts over the loan tenure.

Personal Loan EMI Calculation Formula

The method of interest calculation, whether the bank uses the flat rate method or the reducing balance method, determines the formula used to calculate personal loan EMIs. Let us understand the 2 methods of EMI calculation in the following section.

• Flat Rate Method: In this method, the EMI amount remains the same throughout the loan tenure. This is because the personal loan interest is charged on the entire loan principal amount borrowed by the applicant. As per this method, the formula for EMI calculations is:                       

       EMI calculation by Flat Rate Method = (Principal + Interest)/ Loan Tenure in Months

For instance: Mr. X took a loan of Rs. 20 lakh at a flat rate of interest of 15% for a period of 24 months.

       Interest for year 1 = 15% per annum of Principal = 15% of Rs. 20 lakh = Rs. 3 lakh

Interest for year 2, i.e., the loan tenure = Rs. 3 lakh

Total interest payable over the loan tenure = Rs. 3 lakh + Rs. 3 lakh = Rs. 6 lakh

Monthly EMI payouts for Mr. X = (Rs. 20 lakh + Rs. 6 lakh)/24 = Rs. 1,08,333

• Reducing Balance Method: In this method, the personal loan interest is charged on only the outstanding loan principal (which decreases as the loan is paid off) and not the entire loan amount initially borrowed. Thus, this calculation method allows you to save on the total interest payable. The formula for EMI calculations using this method is:

EMI by Reducing Balance Method = [P x (R/100) x {1+(R/100)}^N]/[{1+(R/100)}^(N-1)]

Where,

P refers to the principal/loan amount;

R refers to the rate of interest on a monthly basis i.e. annual interest rate/12;

N refers to the loan repayment tenure in months.

For instance: Mr. Y takes a loan of Rs. 1 lakh at a reducing balance interest rate of 12% p.a. for a period of 24 months.

Monthly interest rate = Annual interest rate/ 12 = 12/12 = 1% per month

Monthly EMI payout for Mr. Y= [100000 x 1 x (1+1)^24]/(1+1)^(24-1)] = Rs. 4,707

ICICI Bank Personal Loan EMI Calculation

ICICI Bank uses the reducing balance method to calculate the EMIs on its personal loans. The table below shows EMI calculation for ICICI Bank personal loans using different combinations of loan amount, repayment tenure and interest rates.

Comparison of EMI Calculation Methods: Flat Rate v/s Reducing Balance Interest Rate

The following table gives a comparison of the difference in EMI payouts when using the flat interest rate method v/s when the reducing balance method is used for varying loan amounts, tenures and interest rates:

How to pay ICICI Personal Loan EMI

The following modes of payment can be used to pay ICICI Bank personal loan EMIs:

• For ICICI bank savings account holders:

1. Internet Banking: You can use internet banking to login to your ICICI bank account and pay your loan EMIs online directly from your bank account.
2. i-Mobile App: You can also use the ICICI Bank i-Mobile App to log into your ICICI bank account and pay your loan EMIs.
3. QR-Code based UPI payments: Customers can scan the QR-Code to make QR-Code based UPI payments of their personal loan EMI.
4. Using ICICI bank debit card at ICICI bank ATMs: You can also make EMI payments by swiping your ICICI bank debit card at any ICICI Bank ATM. The “Pay your loan EMI” option is located under the “Options” menu on the ATM home screen.

•  For Non ICICI bank saving account holders:

1. NEFT: In case you do not have a savings account with ICICI bank, you can make payment of your ICICI Bank personal loan EMI through your other bank by opting for the NEFT facility.
2. RTGS: You can also use RTGS (real-time gross settlement) option to pay your loan EMIs. However, this system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is Rs. 2 lakh.
3. ECS: By opting for Electronic Clearing Service (ECS) you can choose to directly pay your loan EMIs from your savings account with any bank. The deduction happens automatically and you need to ensure that sufficient account balance is maintained in order to do this.
4. Click to Pay: The “Click to Pay” feature offers payment facility using Net Banking of more than 50 different banks operating in India.

Charges levied on Non Payment of EMI – Penal Interest Charges and Cheque Bounce Charges

Some charges may be levied by the bank in case EMI payments are not made on time. The following are some of those penal charges:

Note: These charges may change periodically and GST is applicable as per Government regulations.

Factors Affecting ICICI Personal Loan EMI

The following are key factors which affect ICICI personal loan EMIs:

• Loan Amount: Loan amount or loan principal is the amount of money that you borrow from the lender. Usually a greater loan amount implies greater EMI payouts over the tenure chosen.
• Rate of Interest: It is the interest rate charged by the lender on the loan amount. Usually a higher rate of interest results in higher EMI payouts.
• Loan Tenure: It is the repayment period over which the loan can be repaid. While, a longer tenure leads to lower individual EMI payouts, it may also result in greater interest payout.
• Interest Calculation Method: The method used to calculate personal loan EMIs also affects the amount of interest payable. EMI calculated using the reducing balance method is slightly lower as compared to when EMI is calculated using the flat rate method.

Benefits of Using an EMI Calculator

Some key advantages of using an EMI calculator are given below:

• EMI calculator lets you know the monthly EMI payouts before you can actually avail the loan. This helps you plan your finances in a better way and choose loan tenure and amount as per your budget.
• It also helps save time as you no longer have to carry out the tedious mathematical calculations by hand. The calculator gives you instant results once you specify the loan amount, tenure and interest rate.
• The EMI calculator can be used for free anytime and anywhere. Moreover, there is no limit on the number of times that you can use the calculator. Thus, you can compare EMI amounts of various personal loans from different lenders by providing just 3 key bits of data.
• EMI calculator is also accurate and reliable as computerized algorithms give error-free results as compared to manual calculations. Moreover, the results are instantaneous.

FAQs

Q1. How to pay ICICI personal loan EMI online?

You can pay your ICICI Bank personal loan EMIs online via the following ways:

• If you have a savings account with ICICI bank, you can pay your EMIs online through internet banking, i-Mobile app, through QR-Code based UPI payments.
• If you do not have a savings account with ICICI bank, you can pay your EMIs online using the account in a different bank by opting for NEFT facility, RTGS, ECS or through Click to Pay.

Q2. Does the EMI calculator also show the prepayment charges?

No, the EMI calculator does not show the prepayment charges. You can check the prepayment charges in the loan agreement provided by the lender.

Q3. What is floating rate EMI calculation?

When EMIs are calculated using floating interest rate method, it is known as floating rate EMI calculation. Floating interest rate is variable in nature and depends on RBI policies and market fluctuations. For instance, Repo Linked Lending Rate (RLLR) is dependent upon repo rate. Whenever the repo rate is changed by RBI, a similar change is reflected in the loan interest rate. Floating interest rate mechanism is currently not applicable to ICICI personal loans.

Q4. Can I pay ICICI personal loan EMIs in cash?

No. At present ICICI bank personal loan EMIs cannot be paid in cash.

Q5. How to use the EMI calculator?

Paisabazaar’s personal loan EMI calculator can be used by following the steps given below:

Step 1: Access Paisabazaar EMI calculator.

Step 2: Fill in the loan amount, tenure and interest rate

Step 3: The EMI amount is displayed instantaneously on the right hand side of the page.

Others details provided include total interest cost of the loan, total amount payable, etc.

Q6. How to arrive at the right EMI amount?

The EMI calculator can be used to check various combinations of loan amount, interest rate and tenure to arrive at an EMI that suits your budget. Consider your monthly expenditure and all your outstanding debt to decide upon a suitable EMI amount that can be paid off easily without adversely impacting your financial stability.

Q7. Which method does ICICI bank use to calculate EMIs on its personal loans?

ICICI Bank uses the reducing balance method to calculate personal loan EMIs. According to this method, interest is calculated on the outstanding loan principal amount only and not on the total principal. Thus, as the outstanding loan amount decreases, the interest accrued also decreases over the tenure of the loan.

Q8. Is it possible to change the repayment mode for ICICI personal loan EMI payment? Are there any charges for changing the repayment mode?

Yes, you can change the repayment mode for ICICI personal loan EMI payments. In case you wish to do so, you will be required to pay repayment mode swap charges which are Rs. 500 per transaction plus GST as applicable.

Q9. Is there a penalty for late payment of ICICI Bank personal loan EMIs?

Yes, an additional interest of 24% p.a. @ 2% per month is levied in case of late payment of ICICI bank personal loan EMIs. This penalty is applied from the due date of the EMI till the time the payment is made.