Minimal paperwork, faster processing and zero collateral requirement makes personal loans a popular borrowing option. The EMI amount payable on a personal loan is one of primary things that one must consider before finalizing upon 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 can help you choose a convenient loan amount and tenure as per your budget and enables you to plan your repayment strategy for better management of finances.
The article gives several key insights into how the personal loan EMI calculator functions, the EMI calculation formula, factors affecting personal loan EMI, etc.
How Does Personal Loan EMI Calculator Function?
Personal loans have fixed repayment tenure with monthly repayments known as EMI (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 any time of the day and unlimited number of times to calculate personal loan EMI that fits into your budget.
Procedure to Use Paisabazaar’s Personal Loan EMI Calculator
The personal loan EMI calculator on Paisabazaar’s website 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. On the Paisabazaar personal loan EMI calculator page, input your desired personal loan amount.
Step2. Provide the expected personal loan interest rate
Step3. 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 total interest payable and the total amount payable (loan principal + interest).
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.
Alternatively, you can use the MS-Excel formula “PMT” to calculate your personal loan EMI using an Excel sheet. The complete formula syntax for EMI calculation using Excel is:
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)
Download the PL EMI Calculator in Excel
While the EMI calculation results will be the same whether you use the online EMI calculator or the manual calculation formulas, with the availability of online EMI calculator it is no longer necessary to perform this tedious calculation by hand as the result can be obtained instantly by providing the required data.
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 @ 10.50% p.a. | Rs. 8,815 | Rs. 26,445 | Rs. 44,074 |
| 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 tenure:
| 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 |
How to Pay your Personal Loan EMI
Given below are a few key ways through which you can pay your personal loan EMI:
- Autopay: You can set-up autopay for your EMI payments using internet banking.
- Standing Instructions: You can set standing instructions (SI) using NACH mandate.
- Online Transfer: You can also pay your EMIs online using RTGS, NEFT, IMPS payments.
- Draft/Cheque: Drafts or post-dated cheques can also be used to make your personal loan EMI payments.
Note: The different EMI payment options mentioned above may or may not be available with all the lenders.
Charges Levied on Non Payment of EMI
In case, loan EMI payments are not completed in a timely manner, there are a few other personal loan charges that might be applicable over and above the actual EMI payable. These include:
- Cheque/NACH/SI bounce charges: These are applicable when timely EMI payment does not happen due to low balance in account or closure of the account used for EMI payments. This is usually a fixed charge applicable each time an automated EMI deduction fails.
- Late payment charges: In case of delayed payment of EMI, a late payment charge may be applied by the bank/NBFC from whom the loan was obtained. This charge can be either a fixed amount or a percentage of the amount remaining unpaid.
- Penal Interest charges: Penal interest charges are applicable on the unpaid EMI amount. This is usually a fixed percentage amount payable per month on the principal amount unpaid till the due EMI is paid.
The above charges are applicable in addition to the original EMI payable on the personal loan.
Factors Affecting Personal Loan EMI
The key factors affecting your overall EMI amount payable include the following:
- Loan principal – As a rule of thumb, 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 pay out 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. Whereas, 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 reduce personal loan EMI?
Given below are a few key ways that could help you reduce 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
Q2. Can I pay my personal loan EMI using a credit card?
No. As of yet, no option is available for payment of personal loan EMI using a credit card. You do have the option of taking a loan on a credit card to pay your due personal loan EMI, but it is not advisable and financially irresponsible.
Q3. Is GST applicable to personal loan EMI?
No. GST is not applicable to personal loan EMI. However, GST at 18% is applicable on various other personal loan charges such as processing fees, foreclosure charges, late payment charges, etc.
Q4. How to calculate EMI for personal loan manually?
The formula used to calculate EMI for personal loan 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) = loan interest rate (annual)/12
N = Loan tenure in months
Alternately 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)
Q5. 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 department of your lender and follow the instructions provided by them. The process to initiate this change tends to vary significantly from one lender to another.
Q6. What will happen if personal loan EMI is not paid?
In case you do not pay your personal loan EMI, you will have to incur penal charges in the form of late payment fees and penal interest on the amount remaining unpaid. If the amount is still unpaid after a 3 month period, the lender will try to recover the dues using recovery agents and subsequently offer you a settlement. The lender will also report this delayed payment/default to credit agencies and this will adversely impact your credit score making it difficult to get approved for new loans/credit cards in the future.
Q7. Which is better – personal loan or credit card EMI?
The two financial products are not comparable as they serve different purposes. While credit card EMI conversion allows you to fund big-ticket purchases after making the purchase, a personal loan features much more flexible end use. Moreover, while the interest rate of personal loans is typically lower than the rate offered in case of EMI conversion, those opting for no-cost EMI definitely get a better deal. The impact of both instruments on the borrower’s credit score is also comparable as these are both types of unsecured credit that increase the outstanding debt of the borrower.
Q8. 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 pay out 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 pay out but increase your overall interest payment over the loan tenure.
Q9. Does 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.
Q10. Can I prepay my personal loan EMI?
Prepayment refers to making repayments beyond your regular personal loan EMI payment amounts. In case you pay off the entire loan before the completion of the loan tenure, it is termed as foreclosure or full prepayment. In case only a portion of the outstanding loan principal is prepaid ahead of time, it is termed as partial prepayment. While most banks allow both partial prepayment as well as foreclosure of personal loans subject to some key terms and conditions, the exact details tend to vary from lender to lender. So you will have to get in touch with your lender or read through the loan agreement in order to figure out if prepayment is allowed in case of your personal loan.