Personal Loan EMI Calculator

NiyoX Personal Loan EMI Calculator is a simple tool to help you better plan your borrowing and loan repayments. It’s easy to use—all you need to do is enter your preferred loan amount, interest rate, and tenor (number of months in which you want to repay the loan). The personal loan calculator tool will instantly give you a break of your EMI (Equated Monthly Installment), the Total Repayment Amount, and the Total Interest Amount on your loan. It’s the simplest personal loan interest calculator there is!

Benefits of using the EMI calculator for personal loan

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

• Compare loans: You can enter a fixed loan amount and tenor, and vary the interest rate and processing fee depending on the rates fixed by the various banks. The tool will give you a clear idea of the total cost of your loan and based on that you can choose your personal loan provider.
• Saves time: Calculating personal loan EMI with the tool takes less than a minute when you use a calculator. Also, EMI calculators are extremely easy-to-use and 100% accurate.
• Compare loan tenors: Compare your EMIs with different loan tenors to see which one works the best for you. If you are comfortable paying a higher EMI to close your loan early, go for a shorter tenor. Else, you can opt for a longer tenor with lower EMIs.
• Verify EMI information: You can validate the repayment schedule offered by the bank by using an EMI calculator.

What factors affect personal loan EMI?

• Loan amount: The higher your loan amount, the EMI payable would be higher. The maximum loan amount you can avail yourself is decided based on your profile, income, occupation, repayment history, and other factors.
• Interest rate: The rate of interest on your loan is directly proportional to the EMI. The higher the rate of interest, your EMI would be higher. The interest rate is based on a number of factors such as your income, your credit history, repayment capacity, etc.
• Loan tenor: The loan tenor is inversely proportional to the EMI. The longer the tenor, the lower the EMI. However, with a longer tenor, you may end up paying more as interest.

How to calculate personal loan monthly interest rate?

The most crucial information you must look forward to while researching the best option for a personal loan is the interest rate offered by any lender. Once you know the interest rate on the loan you are considering, it’ll be easy to calculate your EMIs. Generally, the rate of interest is usually mentioned as an annual rate and you need to convert it to a monthly one to go ahead with calculating your EMIs. Here’s how to convert your annual interest rate to a monthly one:

For instance, if the rate of interest offered on your loan = 18% p.a.

The monthly rate of interest = 18/12 = 1.5% per month

Should I prepay my personal loan?

Prepayment of a loan is when you pay the entire or partial amount of your loan before it is due. While a load repaid before time gives peace of mind, it may not be financially beneficial. Here are two reasons to consider before you make a prepayment of your loan amount:

• Prepayment charge: Usually, most banks charge a penalty or a prepayment fee when you pay off your loan before its due date. Prepayment charge varies across banks—it could be a percentage of the amount you are paying, or a flat fee. It could even be a percentage of the overdue interest amount. At times, you could even get lucky and your bank might not charge you at all. In any case, it’s best to check with your bank or read the loan documents carefully to understand your individual situation.

• Comparing the penalty fee you’ll incur versus the savings on interest charges for the remainder of your loan period will give you clarity if repaying is the best option for you. Most loans come with a lock-in period during which you can’t prepay or foreclose your personal loan.

• Savings on the principal amount: Prepaying your loan very early into your tenor could help you save a lot. But, due to the lock-in period, it might not be a viable option. After paying EMIs through the lock-in period, often borrowers think that the interest on the remaining EMIs will be low. And closing the loan would not lead to substantial savings on the remaining cost of interest.

However, interest paid on the unpaid principal amount remains the same as banks calculate interest on a reduced-balance basis. While planning to foreclose your loan, consider making your decision based on the interest rate charged than the remaining tenor.

A smarter option would be to make a partial prepayment instead of foreclosing the loan. Partial prepayment reduces the principal amount remaining, which means you’ll pay lesser interest in the remaining EMIs. However, you’ll need to pay off a substantial amount of your loan for this method to be effective. Also, this will be more beneficial if you do it as early as possible in the loan period. Else, the prepayment fee might surpass interest savings.

What is the formula for personal loan EMI calculation? The mathematical formula for calculating EMIs is:

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

Note:

P: Principal, or loan amount

R: Interest rate per month (annual interest rate divided by 12)

N: Number of monthly instalments, or loan tenor in months

Here’s an example to help you understand the EMI calculation better. Let’s consider—if you plan on taking a loan and want to calculate the EMI to understand how you’ll have to manage your finances each month so you can make timely repayment.

Principal amount P = ₹3,00,000

Interest rate = 18% p.a. So, R = 18/12×100 = 1.5% or 0.015

Loan tenor = 36 months

EMI = ₹3,00,000 x [(0.0029 x (1 + 0.015)^36) / ((1 + 0.015)^36 – 1)] = ₹10,845

Save yourself from doing this complicated math, and use the simple and efficient EMI calculator for personal loan.