Minimal paperwork, faster processing and no collateral requirements make personal loans a popular borrowing option. The EMI amount payable on a personal loan is one of the primary things that one must consider before finalizing a particular loan. Using a personal loan EMI calculator is the best and the easiest means to calculate and determine your EMIs quickly and accurately. It helps you in choosing a convenient loan amount and tenure as per your budget and enables you to plan your repayment strategy for better management of finances.
How Does Personal Loan EMI Calculator Function?
Personal loans have fixed repayment tenure and monthly repayments known as EMIs (Equated Monthly Installments) that need to be made over the entire loan tenure. EMI calculator is a tool that helps you calculate your loan EMI based on some key data such as the amount borrowed, interest rate applicable to the loan and tenure. You can use the EMI calculator free of charge at any time to calculate personal loan EMIs that fit into your budget.
Procedure to Use Paisabazaar’s Personal Loan EMI Calculator
The Paisabazaar personal loan EMI calculator uses some key information provided by the user to show the EMI amount instantly. The following is a step-by-step guide regarding how to use the calculator:
Step 1: Input your desired personal loan amount
Step 2: Provide the expected personal loan interest rate
Step 3: Provide the tenure over which you want to repay your loan
On completing the above steps, your personal loan EMI is displayed instantly. You can also view the total interest payable and the total amount payable (loan principal + interest). You can make multiple modifications to arrive at the most suitable EMI option.
Monthly EMI Payment Comparison of Popular Banks in India
Given below is a comparison of the monthly payments (EMIs) of popular banks in the country for different loan amounts, tenures and interest rates:
| Bank Name and Interest Rate | EMI Payout for Loan Tenure of 1 Year | ||
| Loan Amount of Rs. 1 lakh | Loan Amount of Rs. 3 lakh | Loan Amount of Rs. 5 lakh | |
| SBI @ 9.60% p.a. | Rs. 8,773 | Rs. 26,319 | Rs. 43,865 |
| ICICI @ 10.50% p.a. | Rs. 8,815 | Rs. 26,445 | Rs. 44,074 |
| Axis @ 11% p.a. | Rs. 8,838 | Rs. 26,514 | Rs. 44,191 |
| HDFC @ 12.50% p.a. | Rs. 8,908 | Rs. 26,725 | Rs. 44,541 |
| Citibank @ 9.99% p.a. | Rs. 8,791 | Rs. 26,373 | Rs. 43,956 |
| PNB @ 8.95% p.a. | Rs. 8,743 | Rs. 26,228 | Rs. 43,714 |
Personal Loan EMI Calculation
A personal loan EMI calculator lets you compute your EMIs instantly by simply entering the loan amount, interest rate and tenure. Knowing your monthly EMI payouts in advance can help you in better financial planning and management of finances.
The following table illustrates the difference in EMI payments for various loan amounts over different loan tenures:
| Loan Amount (Rs.) | Interest Rate (p.a.) | EMI for 1 Year Tenure (Rs.) | EMI for 2 Year Tenure (Rs.) | EMI for 3 Year Tenure (Rs.) | EMI for 4 Year Tenure (Rs.) | EMI for 5 Year Tenure (Rs.) |
| 1 lakh | 11.50% | 8,862 | 4,684 | 3,298 | 2,609 | 2,199 |
| 2 lakh | 12.5% | 17,817 | 9,461 | 6,691 | 5,316 | 4,500 |
| 3 lakh | 12% | 26,655 | 14,122 | 9,964 | 7,900 | 6,673 |
| 4 lakh | 13% | 35,727 | 19,017 | 13,478 | 10,731 | 9,101 |
| 5 lakh | 12.5% | 44,541 | 23,654 | 16,727 | 13,290 | 11,249 |
Factors Affecting Personal Loan EMI
The key factors affecting your overall EMI amount payable include the following:
- Loan Principal – The higher the amount borrowed as a personal loan, the higher will be your EMI as long as the tenure and interest rate remain constant.
- Interest Rate – The higher the interest rate, the higher will be your individual EMI payout as well as the total interest payable on your personal loan.
- Tenure – When a longer tenure is opted for, individual EMI payments will decrease as compared to a shorter tenure for the same loan. But a longer tenure also results in higher total interest payable over the loan tenure.
Besides, the method of interest calculation adopted by a lender also affects the EMI payable on a personal loan. The flat balance method of interest calculation involves calculating interest on the entire loan principal amount throughout the loan tenure. Thus, in this case, the EMI amount remains unchanged during the entire loan tenure.
The reducing balance method involves computing interest only on the outstanding loan principal amount for each successive month instead of the entire amount initially borrowed. As a result, the principal used to calculate interest decreases over time leading to a decrease in the successive loan EMI as the repayment tenure progresses. Currently, most banks offer personal loans based on the reducing balance interest calculation method and the same method is used by Paisabazaar’s online personal loan EMI calculator.
FAQs
Q1. How to arrive at the right EMI amount?
You should first analyse how much you can afford to pay in EMIs every month. Based on this data, you can check EMI for different tenures at a fixed rate of interest. Select the best feasible EMI to repay your loan with minimum difficulties.
Q2. What method of EMI calculation do most banks use?
Most lenders use the reducing balance method to calculate the EMI applicable on a loan. It is advisable to confirm the same from the lender at the time of applying for the loan.
Q3. How to reduce personal loan EMI?
Given below are a few key ways that can be helpful in reducing the EMI payable on your personal loan:
- Opt for a lower loan amount
- Opt for a longer EMI tenure
- Get approved for a loan with a lower interest rate/complete a personal loan balance transfer to get a lower rate on the outstanding loan
Q4. How can I change my personal loan EMI date?
In case you want to change your personal loan EMI date, you should contact the customer care of your lender and follow the instructions provided by them. The process to initiate this change varies significantly from one lender to another.
Q5. Can I get my personal loan EMI changed?
There are two key ways you can decrease your existing personal loan EMI:
Option 1- Make a prepayment on your existing loan. This will decrease the outstanding personal loan principal leading to a lower EMI payout over the remainder of the loan tenure.
Option 2- Negotiate with the lender for an extension of your loan tenure. This will decrease your individual personal loan EMI payout but increase your overall interest payment over the loan tenure.
Q6. Does the personal loan EMI calculator include the GST component in its results?
No. Currently, Paisabazaar’s EMI calculator does not take into account the GST component when calculating the EMI on a loan.
Q7. What is the Personal Loan EMI Calculation Formula?
The formula used by the personal loan EMI calculator is:
EMI = [P x (R/100) x {1+(R/100)}^N]/[{1+(R/100)}^(N-1)]
where, EMI = equated monthly installments
P = loan principal i.e. amount borrowed
R = loan interest rate (monthly basis) = annual interest rate/12
N = loan tenure in months
The above formula works for calculating all types of loan EMI, not just personal loan EMI.
Q8. What is the MS-Excel formula to calculate the personal loan EMI manually?
You can use the following MS-Excel formula to calculate your personal loan EMI manually:
PMT (rate, nper, pv)
where, rate = Personal loan interest rate (in percentage)
nper = Loan tenure in months i.e. number of EMIs payable
pv = Loan principal (present value)