Are you planning to take a personal loan for purposes such as marriage, education, travel or any other needs? Keep the personal loan EMI calculator at the core of your repayment strategy. Knowing what you will pay beforehand is always beneficial for you. You can thus know the savings you need to make for a smooth repayment experience. In this blog, we will discuss the utility of the personal loan EMI calculator.
What is a Personal Loan?
Firstly, banks or non-banking financial companies (NBFCs) can disburse you a maximum personal loan of INR 50 lakh, depending on your income, credit score and repayment potential. However, only a few lenders disburse that far. Most of them disburse up to INR 30 lakh.
Personal loan interest rates offered on the loan range from 10-25% per annum. The rates depend on the loan amount, income credit score, repayment tenure, etc.
Greater income, a credit score of above 700, strong repayment potential will increase your personal loan eligibility and help you grab lower interest rates.
As far as repayment tenure is concerned, it can be for a maximum of five years.
What is a Personal Loan EMI Calculator and How Does It Function?
A personal loan EMI calculator works on three factors – loan amount, interest rate and tenure.
The greater the loan amount, the higher the Equated Monthly Instalment (EMI) and vice versa.
The lower the interest rate, the lower the EMI amount and vice versa.
The longer the repayment tenure, the lower the EMI amount and vice versa
However, the interest amount remains much higher when choosing a longer tenure.
You can find the personal loan EMI calculator online to calculate your repayment.
Just enter the loan amount, interest rate and tenure in the calculator to find the repayment journey you will have.
Formula to Calculate the Personal Loan EMI
The calculator computed the EMI using this formula.
E = P x R x (1+r)^n/((1+r)^N – 1
E = Equated Monthly Instalment
P = Borrowed Loan Amount
R = Rate of Interest
N = Number of Instalments Payable Over the Loan Term
Personal Loan EMI Calculation for INR 5 Lakh at an Interest Rate of 12% Per Annum
| Tenure (In Years) | EMI (In INR) | Interest (In INR) | Total Payment (In INR) |
| 1 | 44,424 | 33,093 | 5,33,093 |
| 2 | 23,537 | 64,882 | 5,64,882 |
| 3 | 16,607 | 97,858 | 5,97,858 |
| 4 | 13,167 | 1,32,012 | 6,32,012 |
| 5 | 11,122 | 1,67,333 | 6,67,333 |
Personal Loan EMI Calculation for INR 10 Lakh at an Interest Rate of 12% Per Annum
| Tenure (In Years) | EMI (In INR) | Interest (In INR) | Total Payment (In INR) |
| 1 | 88,849 | 66,185 | 10,66,185 |
| 2 | 47,073 | 1,29,763 | 11,29,763 |
| 3 | 33,214 | 1,95,715 | 11,95,715 |
| 4 | 26,334 | 2,64,024 | 12,64,024 |
| 5 | 22,244 | 3,34,667 | 13,34,667 |
Personal Loan EMI Calculation for INR 15 Lakh at an Interest Rate of 12% Per Annum
| Tenure (In Years) | EMI (In INR) | Interest (In INR) | Total Payment (In INR) |
| 1 | 1,33,273 | 99,278 | 15,99,278 |
| 2 | 70,610 | 1,94,645 | 16,94,645 |
| 3 | 49,821 | 2,93,573 | 17,93,573 |
| 4 | 39,501 | 3,96,036 | 18,96,036 |
| 5 | 33,367 | 5,02,000 | 20,02,000 |
Let’s Check Out the Benefits of the Personal Loan EMI Calculator
A personal loan EMI calculator carries a lot of importance to one’s repayment journey. So, we have discussed the benefits of the calculator in the following ways.
Personal Loan EMI Calculator Gives You an Idea of the Monthly Savings to Make
The EMI amount presented through the personal loan EMI calculator gives you an idea of the savings you need to make to ensure a smooth repayment journey.
So, if you are earning INR 50,000 a month and the EMI comes as INR 13,000 using the calculator, live your life thinking that you earn INR 37,000 (50,000-13,000). This will help inculcate a good financial discipline, allowing you a seamless personal loan repayment experience.
Allows You to Make Changes to the Repayment Journey
The personal loan EMI calculator amortisation comes out in the open when putting the loan amount, interest rate and tenure in the calculator. The amortisation shows the distribution of the principal and interest component of the loan. As someone seeking a healthy financial life, paying less on the loan would be your top priority. You can thus use the calculator to figure out the time by which you can prepay the loan fully or partly. It will help curb your overall interest repayment.
An example will help you understand better.
For example, you take a personal loan of INR 5 lakh for 5 years at an interest rate of 15% per annum. The overall interest repayment will be over INR 2 lakh if the loan continues throughout 5 years. You can, however, reduce your liability by saving regularly.
So, if your current income is INR 50,000, you can save INR 10,000 every month to accumulate INR 1,20,000 a year. In two years, you will accumulate INR 2,40,000. This is precisely the principal outstanding you will have 1 year later. Keep accumulating and prepay INR 2,40,000 a year later to save on interest repayments.
Over three years, you will pay interest worth around INR 1,70,000. The prepayment charge at 3% of the outstanding balance worth INR 2,40,000 at the end of three years will be INR 8,496 (inclusive of 18% GST). Adding the interest paid over three years and the prepayment charge, your total liability comes as INR 1,78,496. Savings realised from this will be INR 22,000.
Accurate Results Available from the Personal Loan EMI Calculator
Manual calculation of the EMI amount is always fraught with errors. Also, the personal loan EMI amount calculation is done based on the compounding interest formula, which is not that easy to master manually. So, you are advised to use the EMI calculator that gives you accurate results based on your loan amount, interest rate and tenure. Its intelligent algorithms make it happen for you.
Time-saving Option
Within a few seconds, the calculator shows the results. So, it saves much of your time, which often gets consumed while calculating the EMI through paperwork.
Where Can I Access the Personal Loan EMI Calculator?
You can check the website of lenders or aggregators to access the personal loan EMI calculator. The calculator will likely work on a reducing balance basis, which means the interest will apply to the balance left after each monthly instalment.
Wrapping Up
Being on top of your finances is critical to experiencing a hassle-free repayment journey. A personal loan EMI calculator is one of the ways to ensure so. For more insights on personal finance, economy, beauty, health and women empowerment, keep visiting zarooribaathai.in – where you get true and well-researched information.
