Personal Loan EMI Calculator Nov, 2018

Planning to take a personal loan. Find out here how much would the EMI be?
Personal Loan Amount
No. of Months
Interest Rate
%
Monthly EMI
Total Interest Payable
Total Principal
Total Payment(Principal + Interest)

Introduction

You can take a Personal loan 28 times more than the monthly instalment you can pay. Simply means if you can afford to pay around Rs.50000 in EMIs every month for a Personal Loan, you can get Personal Loan of around Rs.14 lacs.

What is a Personal Loan

As the name suggests, it is taken for a personal purpose which could range from wedding in the family OR funding higher education OR spending for vacation OR consolidating credit card dues OR anything else. The lender never asks and hence the name personal loan.

The lender does not need your house papers or car RC or any other things – it is a clean loan. No security required by the lender. Such a loan extended to a salaried person is called personal loan. Such a loan, unsecured in nature, extended to a business is called Unsecured Business Loan. We will stick to personal loan here in this article.

What you borrow has to be returned in some defined time. Whatever is borrowed, one has to pay interest on that. Banks define that time frame as TENURE of the loan and it ranges from 1 year till about 5 years. Usually nobody borrows for 1 year and mostly people go for 3 years.

Banks charge interest on the money so lent to you. That interest is dependent on many factors but it ranges between 13-18%. It depends on factors like where you are employed – which company, what is your salary bracket, what is your past credit history and certain other things.

Why to take a Personal Loan:

As mentioned earlier, it is taken for a personal purpose. But the clear message is – Control the expense to the point where you REALLY-REALLY need it.

What is an EMI:

Banks calculate how much exactly you have to pay them back. And they have to keep it simple for you as well. You should pay SAME AMOUNT every month so that it is easier for you to follow. This is called EMI – EQUATED MONTHLY INSTALMENT. EQUATED because it is EQUAL/SAME every month. MONTHLY because you have to pay MONTHLY. INSTALMENT – because it is a series of many payments. What looks simple has to have some kind of complex calculation running in the background. EMI is made of interest component & a Principal component calculated monthly. Every EMI (mind it – there are 36 EMIs in a 3 year loan) has different principal & different interest component every month. The principal component increases every month & the interest component decreases every month. But both put together result in same EMI every month. You can use PMT function in excel to compute it.

Reducing Balance:

It is a term used often but is not understood very well. It is actually not that difficult. It means that banks will charge interest on the loan amount that remains to be paid. Remember we told you about EMI made of principal component and interest component. The principal component that the Bank recovers every month from your EMI reduces the loan amount outstanding. The next month’s interest is calculated on that amount and hence the name Reducing Balance. Some people don’t understand this so they calculate u=interest in a simple way. They sum all the EMIs they have to pay, subtract the principal from that –they get the interest portion. This interest portion they divide by the loan tenure (in years). The result which they get – they divide by loan amount & they get an interest rate. If you wouldn’t have already guessed, the interest rate so arrived is less than the actual loan rate. Why? That’s another story – it’s because Banks take money from you every month. So what? Forget it!!

The need for this Personal Loan Eligibility Calculator

Financial Calculations are not so easy to understand. Even though the EMI Calculator is the most basic one, still it is a struggle sometimes to understand the same. We thought why not make a calculator that helps you easily to determine what you have to pay as Personal loan EMI every month for a particular loan amount for a particular tenure of personal loan. That’s it. The rest is done by the calculator.

How to use this calculator

Just going through the formalities, I will now tell you how to use this Personal Loan EMI calculator.

PERSONAL LOAN AMOUNT: Put in the amount of Personal Loan you are looking to take.

NO. OF MONTHS: Here you select the tenure of the loan you feel is comfortable for you – 36 months (3 years) or 60 months (5 years). We have put the default value at 3 years which is what mostly the applicants go for as repayment term whenever they are taking a Personal loan. People generally try going in for longer tenures. Well that seems easy but burns a huge hole in your pocket. On a Rs.10 lacs loan, you have to pay Rs.2.5 lacs interest for a 3 year loan, but Rs.4.25 lacs interest for a 5 year loan. So select wisely.

INETREST RATE: Enter here the current offer in the market for the best interest rate. You can check offers on our site to enter the new interest rate. Default value we have put here is around 15% which we believe is much closer to the prevailing interest rates in the market.

What you get as an answer is the EMI you will have to pay monthly for the loan. If you would look around slightly on this page, you can find offers on Personal Loans. Choose from one of them, get door-step service & save money. Then go on a long drive for a holiday and make your family happy.

Document List

Documents required for Personal Loan

Salaried

Self Employed Professional

Self Employed Non Professional

Application form

Y

Y

Y

KYC

 

 

 

Photographs

Y

Y

Y

Identity Proof

Y

Y

Y

Address Proof

Y

Y

Y

Age Proof

Y

Y

Y

Bank Statements

Y

Y

Y

Signature Verification

Y

Y

Y

Income Proof

 

 

 

Latest Salary Slip / Form 16

Y

 

 

Income Tax returns of 2 previous financial years along with complete financial/audit report.

 

 

Y

Income Tax Returns of 2 previous financial years.

 

Y

 

Other Documentation

 

 

 

Business Stability proof / Ownership proof

 

Y

Y

Employment Stability Proof

Y

 

 

Partnership deed and Letter signed by all partners authorising one partner

 

 

Y

Companies and Societies: Resolution by Board of Directors (or such managing body) and Memorandum and Articles of Association

 

 

Y

Disclaimer

The data generated herein is completely and solely based on the information/details provided by you in response to the questions specified by the site BankerBhai.com. Such information and the resultant data is provided only for user's convenience and information purposes. BankerBhai.com does not guarantee accuracy, completeness or correct sequence of any the details provided therein and therefore no reliance should be placed by the user for any purpose whatsoever on the information contained / data generated herein or on its completeness / accuracy. The use of any information set out is entirely at the User's own risk. User should exercise due care and caution (including if necessary, obtaining of advise of tax/ legal/ accounting/ financial/ other professionals) prior to taking of any decision, acting or omitting to act, on the basis of the information contained / data generated herein. The information contained / data generated herein may be subject to change, updation, revision, verification and amendment without notice and such information/data generated may change materially.

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