Personal loan calculator india By thinkforu.org
Personal Loan EMI/Month
Personal Total Interest Payable
Personal Total Amount
What is EMI (Equated Monthly Installment) ?
Equated Monthly Installment
- EMI for short - is the amount payable every month to the bank or any other financial institution until the loan amount is fully paid off.
It consists of the interest on loan as well as part of the principal amount to be repaid. The sum of principal amount and interest is divided by the tenure, i.e., number of months, in which the loan has to be repaid.
This amount has to be paid monthly. The interest component of the EMI would be larger during the initial months and gradually reduce with each payment or payment
The exact percentage allocated towards payment of the principal depends on the interest rate. Even though your monthly EMI payment won't change, the proportion of principal and interest components will change with time.
With each successive payment, you'll pay more towards the principal and less in interest.
Here's the formula to calculate EMI:
EMI Formula
where
E is EMI
P is Principal Loan Amount
r is rate of interest calculated on monthly basis.
(i.e., r = Rate of Annual interest/12/100. If rate of interest is 10.5% per annum, then r = 10.5/12/100=0.00875)
n is loan term / tenure / duration in number of months
For example, if you borrow ₹10,00,000 from the bank at 10.5% annual interest for a period of 10 years (i.e., 120 months), then EMI = ₹10,00,000 * 0.00875 * (1 + 0.00875)120 / ((1 + 0.00875)120 - 1) = ₹13,493. i.e., you will have to pay ₹13,493 for 120 months to repay the entire loan amount.
The total amount payable will be ₹13,493 * 120 = ₹16,19,220 that includes ₹6,19,220 as interest toward the loan.
Computing EMI for different combinations of principal loan amount, interest rates and loan term using the above EMI formula by hand or MS Excel is time consuming, complex and error prone.sbi personal loan calculator
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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: Opting for a longer tenure would lead to lower EMI, but would lead to higher interest cost
To reduce your personal loan EMI payments, you can consider:
Making prepayments whenever possible:
When you partly prepay a loan, you pay a portion of the outstanding loan amount early, which in turn gives you a choice to either reduce EMI or tenure.
Go for lower EMIs only when you are struggling to repay your existing EMIs.
If not, tenure reduction is wiser choice as it will help you save more on your loan’s overall interest cost.
A personal loan usually has a lock-in of one year after which you can make partial or full loan prepayments. Depending on the lender, prepayments may also incur prepayment charges.
Transferring your personal loan: You can also consider transferring your personal loan to another lender offering lower interest rates. Some lenders may also offer longer tenure for personal loan balance transfer.
But before opting for personal loan balance transfer, do a detailed cost-benefit analysis to ensure the amount you save on the interest is significantly higher than the costs incurred during the loan transfer.
Note, that your existing lender may charge prepayment/foreclosure fees, if the loan was availed at fixed interest rates.
Additionally, the new lender may charge processing fee, administrative fee, etc. on the transferred loan.
Frequently Asked Question
Our EMI calculator automates this calculation for you and gives you the result in a split second along with visual charts displaying payment schedule and the break-up of total payment.
Ans. Lenders usually use the reducing balance method to calculate the EMI applicable on a personal loan. It is advisable to confirm the same from the lender at the time of applying for the loan.
Ans. In case you want to change your personal loan EMI date, you should contact your lender. The process to initiate this change may vary from one lender to another.
Ans. GST is not applicable on the principal repayment or interest payment of the loan.
Ans. An amortization schedule is a table that displays the interest and principal components of your EMIs throughout the loan tenure.
Ans. You can pay your personal loan EMIs by issuing Standard Instructions (SI) or NACH mandate to your bank or by submitting post-dated cheques to your lender. Some lenders also offer the option of direct deduction of EMIs by your employer.
A: An online personal loan calculator is a tool that helps you calculate the EMI (Equated Monthly Installment) you would be required to pay for a personal loan in India. It considers the loan amount, interest rate, and loan tenure to give you an estimate of your monthly payments.
A: To use an online personal loan calculator in India, you would need to provide the following information:
Loan amount
Interest rate
Loan tenure
A: An online personal loan calculator in India uses a mathematical formula to calculate your monthly EMI based on the loan amount, interest rate, and loan tenure. It takes into account the principal amount, interest rate, and repayment tenure to arrive at the EMI amount.
A: An online personal loan calculator in India helps you get an estimate of your monthly payments for a personal loan. It helps you plan your finances better and decide whether a particular loan offer is affordable for you. You can also compare different loan offers from different lenders using a loan calculator to choose the best option for you.
A: Online personal loan calculators in India are generally accurate, but the actual EMI you would be required to pay may vary slightly depending on the lender's policies and your creditworthiness. The calculated EMI is an estimate and should be used as a guide only.
A: Yes, online personal loan calculators in India are usually free to use. You can find them on the websites of banks, financial institutions, and loan aggregator websites.
Q: Can I use an online personal loan calculator in India for any loan amount interest rate and tenure?
A: Yes, you can use an online personal loan calculator in India for any loan amount, interest rate, and tenure. However, the loan amount, interest rate, and tenure you enter should be realistic and within the range offered by the lender.
A: Yes, an online personal loan calculator in India can tell you how much interest you would be paying over the loan tenure. It shows you a detailed breakup of the interest and principal components of your EMI.
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