Must-Know Aspects of EMI and Personal Loan Calculator
By Anupama Deshpande | Oct 30, 2018

Whenever you avail a loan, you need to repay it with interest. You as a borrower need to repay the loan in the form of EMI. EMI stands for equated monthly instalment. EMI, as the name suggests, is fixed payment amount made by a borrower to a lender to clear off an outstanding loan within a stipulated tenure. EMI is used to pay off both the principal and accrued interest components of the outstanding loan.

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After going through this article, you will come to know must-know aspects of EMI and Personal Loan Calculator:

EMI depends upon following factors:

1. Loan Principal
   This is the amount borrowed by the borrower. This is decided by the borrower and depends upon the need of funds by him. Higher the principal, higher the EMI.
2. Rate of Interest on the Loan
   This is the rate of interest offered by the lender to borrower on the loan. It varies from lender to lender and also is different for different customers of same lender. It depends upon various factors like credit score and other eligibility factors of the customers. Higher the interest rate, higher will be the EMI.
3. Tenure of the Loan
   It is the period in months or years for which the borrower wants to take the loan. It is also decided by the borrower according to his objective of availing the loan. More the tenure, lesser will be EMI.

There are two types of interest charged on loan i.e. Fixed Interest and Floating Interest. It is your choice as to which type of interest you want to opt for. If you avail loan on fixed interest then the EMI remains fixed for whole tenure of the loan and does not vary with any changes in interest rate. While in case of floating rate loan, EMI changes with change in interest rate.

It is always advised to first calculate your EMI of any loan to be taken by you so that you come to know in advance about the amount of EMI required to be paid by you every month and whether you are able to pay that amount with ease.

For helping the borrowers, Personal Loan EMI Calculator is very helpful through which you can calculate Personal Loan's EMI. It is an online tool. You need the inputs such as principal amount, rate of interest and tenure of your loan in order to make use of this calculator.

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EMI is calculated using EMI Calculator. Following formula is used to calculate EMI:

EMI = [P x r x (1+r)^n]/[(1+r)^n-1]

• P is the principal amount borrowed as a loan by the borrower
• r is the rate of interest charged on the loan amount (monthly rate is used for calculation)
• n is the tenure of repayment of the loan (tenure in months is taken for calculation)

Whenever you take a loan, you need to pay off the loan in the form of EMIs. For knowing the amount what you are required to pay every month as EMI, EMI calculator is used.

Suggested reading Personal Loan EMI Calculator

Benefits of using Personal Loan EMI Calculator are:

• Personal Loan EMI Calculator saves you time and effort. If you calculate the EMI on your own, you have to use tedious and complex formula. It may be possible that you make wrong calculations. With manual calculations, you will take hours and hours to perform calculations related to your loan. By using online Personal Loan EMI Calculator, you can perform this task with just a click of your mouse. So when Personal Loan EMI Calculator is readily available then why not use it.
• There is no fee charged for using Personal Loan EMI Calculator. It is completely free of cost using Personal Loan EMI Calculator.
• You come to know about your Loan EMI in advance which helps you decide whether you are able to go for that much amount of loan.
• It is beneficial to know in advance as to how much your EMI will be when comparing the loan options offered by different lenders as this knowledge will be helpful while deciding which loan scheme to choose.
• Most of the Personal Loan EMI Calculators also provide information in a graphical form and draw a pictorial presentation of various items such as outstanding principal, tenure, interest, etc.

EMI calculator is an automated tool which facilitates all your calculations regarding personal loan and you don't need mechanical devices anymore like physical calculator to calculate your EMIs. You can find many Banks, NBFCs, FIs, etc. providing online EMI calculator on their website. You can use any of these calculators without paying any cost/ fee and can easily calculate your EMIs accurately.