EMI Calculator for Personal Loan

Personal Loan EMI Calculation

The table below shows you the loan repayment schedule if you borrow Rs. 1 lakh at an interest rate of 9% per annum for five years.

Personal Loan EMI Summary

Personal Loan EMI for Top Banks in India

BankBazaar's Personal Loan EMI Calculator

BankBazaar personal loan EMI Calculator is extremely easy to use and user-friendly. Put your preferred loan amount, interest rate, processing fee and tenure into the form. Click Calculate to see your estimated monthly payment. You can also view the details of your payment plan through an amortisation chart.

The monthly payment for your personal loan depends on various factors, such as the loan amount, interest rates, and tenure. Calculate your monthly instalments beforehand so that you can budget your finances in a better manner.

Results Overview in EMI Calculator

• EMI: Your monthly EMI which you have to pay to the lender to pay off your personal loan. Based on your loan EMI output you can check your personal loan eligibility in real time at BankBazaar.com.
• Break-up of your total amount payable: The EMI Calculator tool gives you the total personal loan amount payable to the lender. Your total loan amount payable is the sum of your loan amount (Principal), interest payable and processing fees. You can view this in the form of an amortisation table that’s designed to give you a holistic view of your monthly/yearly repayment obligations.

Features of EMI Calculator

• Graphical Representation: Learn how much will be the principal amount and interest will be paid in each EMI. This information will be presented to you in the form of a pie chart.
• Repayment Table: The repayment table, illustrates details with regard to your loan repayment. It helps you understand how much you will have to shell out each month so that you can plan the rest of your expenditures accordingly.

The elements of a repayment table are:

• Principal Paid: This is the portion of your monthly payment that is applied towards the loan principal. This portion will keep increasing each month as the loan matures.
• Interest Paid: This is the portion of your monthly payment that is applied towards interest. This portion will keep reducing each successive month as the personal loan matures.
• Total Payment: Sum total of the principal and interest paid
• Outstanding Loan Balance: The ending balance of any given period corresponds to the principal amount that is owed to the Bank at the end of that period.

The repayment table provides year-wise and month-wise data. So, you can look at the details for each month as well as the cumulative data for each year.

What Factors Can Affect Your Personal Loan EMI?

• Loan Amount: The higher the loan amount, the higher the EMI payable. The maximum loan amount you can avail is decided by the lender based on your repayment capacity, relationship with the bank, and other factors.
• Rate of Interest: In this case, too, the rate of interest is directly proportional to the EMI. The higher the rate of interest, the higher the EMI. The bank will determine your loan’s interest rate based on a number of factors such as your Income, your credit history, repayment capacity, etc.
• Loan Tenure: The loan tenure you choose is inversely proportional to the EMI. The longer the tenure, the lower the EMI. However, with longer tenure you may end up paying more as interest. The loan tenure options usually range between 12 months and 84 months.

How to Calculate Personal Loan Monthly Interest Rate?

When you approach a financial institution in order to take a personal loan, the main piece of information you are looking for is the interest rate that is being offered. Once you know it, and before you start using it to calculate the EMI, you need to convert the rate into a monthly one since the interest rate is always presented as an annual rate. To do so, the following formula is used.
Monthly Interest Rate = Interest Rate/12
For Example, if the interest rate offered to you for your personal loan is 18% p.a., then your monthly interest rate will be calculated as follow:
18/12 = 1.5
This means that the monthly rate of interest will be 1.5%.

Should I Prepay My Personal Loan Early?

When a borrower pays their personal loan off in entirety or partially before the payment is due, it is known as prepayment of loan. Even though prepayment may provide peace of mind to the borrower, it might not be financially beneficial. You should consider the following 2 factors when planning to make prepayments on your loan:

1. Prepayment Charge:Most banks charge a penalty or prepayment fee when you try to pay off your loan earlier. Prepayment fee varies from bank to bank. It can be a percentage of the amount being paid or a flat fee. It can also be calculated based on the overdue interest amount. Some banks might not even charge any prepayment fee at all.
   It is important to compare the penalty fee you incur to your savings on interest charges for the remainder of your loan period. This will help you determine whether prepaying your loan will be beneficial or not. Most loans come with a minimum lock-in period, during which you cannot prepay or foreclose your loan.
2. Savings on the Principal Amount:Prepaying early into your tenure can help you save a lot. However, due to lock-in period, it might not be possible to do so. Borrowers often think that since they have already paid many EMIs, the interest on the remaining ones will be low. Therefore, it would be useless to close the loan since there won’t be much saving on the remaining cost of interest.
   However, interest paid on the unpaid principal amount remains the same as banks calculate interest on reducing balance basis. Rather than making your decision based only on the remaining tenure, factor in the interest rate charged when thinking about foreclosing your loan.
   You can choose to make partial prepayment instead of foreclosing the loan. Partial prepayment reduces the principal amount remaining, thus reducing the interest part of the EMIs. However, you need to pay off a substantial amount of the loan for this method to be effective. Also, it is better to do so as early on in the loan period as possible. Otherwise, prepayment fee might surpass interest savings.

Benefits of Using a Personal Loan EMI Calculator

Here’s some of the benefits of using a personal loan EMI calculator.

• Compare loans: Enter a fixed loan amount and tenure and vary the interest rate and processing fee depending on the rates fixed by the concerned bank. That’ll give you a holistic idea regarding total cost of your loan and based on that you can choose your personal loan product.
• Saves time: Calculating EMI takes less than a minute when you are using a calculator. Also, EMI calculators are extremely easy-to-use and 100% accurate.
• Choose your preferred loan tenure: Vary loan tenures and compare your EMI to see which one is better suited for your financial health. If you are okay with paying higher EMI and would like to close your loan early, go for a shorter tenure. Otherwise you can always opt for a longer tenure.
• Check your repayment schedule: BankBazaar’s personal loan EMI calculator also gives you a complete break-up of your repayment schedule. That way you will get an idea how much you’ll have to pay as interest and how much will be your principal outstanding.
• Verify EMI information: You can validate your repayment schedule as offered by the bank by using an EMI calculator. Other than that, with a calculator you can also calculate the processing fee that you have to pay upfront (usually deducted from the sanctioned amount).

What is the Formula Used for Personal Loan EMI Calculation

The mathematical formula for calculating EMIs is EMI = [P x R x (1+R)^N]/[(1+R)^N-1] where E: Equated Monthly Instalment,

P: Principal or loan amount,

R: Interest rate per month (the annual interest rate is divided by 12 to get the monthly interest rate), and

N: Number of monthly instalments or loan tenure in months.

Personal Loan Restructuring

In a new directive announced by the Reserve Bank of India (RBI), it was announced that banks can help restructure the personal loans of those borrowers who are finding difficult to repay the EMI on time due to the financial crunch caused by Covid19.

The bank can restructure the personal loan by lowering the rate of interest, rescheduling the payment of EMI, or allow the individual to avail a limited loan repayment holiday.

The restructuring window will be available till 31st December 2020. This will help the borrower gain more time to repay their loan. The loan account will not be deemed as a non-performing asset (NPA) and the credit score of the borrower will not have any negative impact. However, borrowers who have been paying their EMIs regularly and were not overdue by more than 30 days as of 1st March, 2020 are eligible to avail the personal loan restructuring facility.

FAQs on Personal Loan EMI Calculator

1. What EMI means?

EMI stands for Equated Monthly Installment. It is a fixed monthly payment made by a borrower to a lender on a set date each month.

2. How to Calculate the Lowest EMI on Your Personal Loan?

In order to calculate lowest EMI, you need to consider your preferred loan amount, the lowest rate offered by the concerned bank, and the maximum tenure. Enter these details while calculating and you will get the lowest EMI applicable on your loan. However, for long-term loans, you pay more towards interest though your monthly repayments are smaller when compared to short-term loans. For short-term loans, the situation is reversed, which means you pay less towards interest though your monthly repayment amount is higher than loans with longer tenures.

3. Can I Pay EMI at One attempt?

If you are referring to prepayment or foreclosure, yes you can do that. However, different banks have different conditions for personal loan prepayment. For instance, HDFC allows you to prepay only if you have completed 12 EMIs. Also, a certain prepayment charge may be levied depending on the bank at the time of pre-payment or foreclosure. So, read your lender’s terms and conditions before opting for foreclosure or prepayment.

4. What Happens If You Fail to Pay Your EMI?

It’s always advised to pay your EMIs on time. Most banks charge a penalty fee of 2% on your EMI if you fail to make repayments. Also, any missed payment will hurt your credit score and may jeopardise your chances of getting a loan in the future. Use a personal loan EMI calculator and calculate your EMI beforehand to avoid any financial stress.

5. How is EMI deducted from debit card?

You can easily get your EMI deducted from your debit card as you don’t have to provide any security deposit. You can set up a standing instruction and provide the relevant details of your debit card where the EMI amount will be deducted from your account on the due date.

6. What are the benefits of knowing your EMI in advance?

Some of the benefits of knowing your EMIs in advance is that first of all you can plan your finances in a better manner which in turn also allows you to pay your EMIs on time which will improve your credit score. You can also plan the payment in such a way that you do not miss any EMI payments which can also help in the bank reducing the overall interest rate in future.

7. What is the formula for EMI in Excel?

You can check the EMI in Excel by using the formula PMT. For example, if you avail a loan of Rs.5 lakh at an interest rate of 12% for a tenure of 48 months, then the formula will be (500000x48x0.01). Here 0.01 will be the rate of interest will be 12% divided by 12 which will yield 0.01%. On using the formula, the result yielded will be the EMI payable.

8. What is the EMI for 3 lakhs personal loans?

The EMI payable will depend on factors such as the tenure and interest rate charged, hence the EMI for a loan amount will differ from bank to bank. For example, if you avail a loan of Rs.3 lakh for a tenure of 1 year where the rate of interest rate charged is 10%, then the EMI payable will be Rs.26,375.

9. How much EMI can i get for 5 lakhs?

The EMI payable for a loan of Rs.5 lakh will differ from bank to bank and will depend on the tenure and interest rate charged. For example, if you avail a loan of Rs.5 lakh for a tenure of 1 year with an interest rate of 10% being charged, then the EMI payable will be Rs.43,958.

10. What is the EMI for 20 lakhs personal loan?

For example, if you avail a loan of Rs.20 lakh for a tenure of 5 years where the interest rate charged is around 10%, then the EMI will be Rs.42,494. However, you must understand that the EMI payable will depend from bank to bank and hence you must properly compare the various personal loan schemes to know the one most suitable for you.