How to Calculate Personal Loan EMI and Eligibility Online – Benefits and Working
When you take a personal loan, you have to repay the amount in the form of EMI (Equated Monthly Instalments). With the introduction of online EMI & eligibility calculators, it has become much easier for customers to know and calculate their eligibility, repayment obligations, and more. While a personal loan EMI calculator tells you how much you have to pay, the eligibility calculator tells you how much loan you can get from a lender.
What is a Personal Loan EMI Calculator?
An online loan calculator makes it easy for you to calculate the monthly instalments on your loan. It is a free online tool that allows you to plan your borrowings and repayments in advance. This lets you avoid financial troubles in the future while repaying your loan.
How does a Personal Loan EMI Calculator Work?
To calculate the EMI, simply enter the rate of interest, loan amount, and tenure. The tool will display the monthly EMI amount and the total payable interest. You can change these values at your convenience to compare loans and gauge your repayment capacity.
Calculate Your Personal Loan EMI
Loan Amount
Rate of Interest (P.a)
%
Loan Tenure (Months)
Monthly EMI
0
Total Interest
Total Amount
How to Calculate Personal Loan EMI?
You can use the personal loan EMI calculator to easily find out monthly instalments and interest amounts. Otherwise, one can use the following formula to calculate the EMI.
E = PxRx(1+R)^n/[(1+r)^n-1]
Here E is the EMI
- P is the principal loan amount borrowed from the lender
- R is the rate of monthly interest
- ‘n’ is the loan repayment period (in months)
The EMI amount will vary depending on the part of the repayment tenure. In the early part, the interest component will be higher and become progressively lower. At the end of the tenure, most payments will go towards paying the principal amount. EMIs also vary depending on the date of disbursal and the time taken for the first instalment.
Benefits of Using an EMI Calculator
The manual calculation of EMIs can get hectic and leaves room for errors. Hence, various online platforms offer EMI calculators for automated calculations.
Here are the benefits of using an EMI calculator:
- Easy to use
- Time-saving
- Accurate results
- Helps to compare loans offered by different lenders
- Convenient access
- Makes finance planning easier
Also Read
What is Personal Loan Eligibility Calculator?
An eligibility calculator for a personal loan will let you check the maximum loan you can get approval for from a lender. Several factors like your income, credit history, repayment capacity, existing liabilities, etc., decide your loan eligibility.
To know the eligible amount, enter details like your resident city, date of birth, total monthly income, rate of interest, and preferred tenure. This will give an estimate of how much loan amount you may get.
This calculator is only an indicative tool and provides an approximation for how much loan you can apply for. The actual eligibility will depend on various factors like employment history, bank account information, etc. To know the actual amount, you can click on the ‘Apply’ button and provide the necessary details/documents.
Personal Loan Eligibility Criteria
The following are some of the important eligibility criteria for personal loans.
- Age – The age limit criteria are usually between 18 and 65 years.
Approved loan amount – It depends on your eligibility. Lenders will consider your credit score, repayment capacity, employment status, income, and other parameters before deciding on the final amount. - Employment – You will need to be either salaried or self-employed with a steady source of income.
- Income levels – The borrower must have a minimum income level depending on the loan amount they have requested. This is generally around Rs. 20,000 to Rs. 25,000 based on the city of residence.
- Credit score – You will need to have a credit score of at least 650 to apply for a personal loan. A score of 750 or above will usually get you the best interest rates.
- Work Experience – Depending on the lender, you can get a personal loan only if you have at least 1 to 3 years of work experience. Self-employed applicants may need to have at least 5 years of turnover to apply for the loan.
Impact of Prepayment of Loan Instalments on EMI
After getting your personal loan approved, repaying the loan is a responsibility that should be taken seriously. The sooner you pay off your debt, the better. You can choose to repay the outstanding amount or a lump sum amount of it through prepayment or part-payment.
If you decide to prepay your loan, it will reduce your total loan amount considerably, and it will cut down the interest applicable. Making prepayments also reduces your EMIs or loan tenure.
However, some lenders might levy foreclosure or prepayment charges. This is deducted from the outstanding amount and ranges between 2% and 5%.
Factors Impacting your Due Amount
While paying off your loan, there are a few considerable factors which might impact your due amount. Here are the factors:
- Interest rate: If you have chosen a fixed rate of interest, you will be charged a stipulated interest on your loan amount. If your loan has a floating interest rate, your EMIs will vary from time to time.
- Prepayment: Prepayment or part payment helps to reduce your loan burden or foreclose your loan. Prepaying a lump sum amount will reduce your due amount considerably.
- Balance transfer: Availing loan transfer facility will reduce your EMIs by lowering the interest rate. It will also reduce your overall loan amount.
Navi offers personal loans of up to Rs. 5 lakh at 12% p.a. for a tenure extendable to 5 years. You can download the Navi app and get loans almost instantly. The entire process including KYC is 100% paperless.
Before applying for a loan, you can use the application to calculate EMIs. To do this:
- Select Personal Loans from the main menu
- Move the slider on the loan amount and EMI amount
- You will get the information on EMI amount details and tenure
Final Word
You can use a cash loan to meet your financial needs, whether it is for medical treatment, children’s education, or to buy a car. A personal loan EMI calculator lets you plan your future repayment, preventing you from being stuck with a loan you can barely afford.
FAQs
Ans: The amount that you can take as a personal loan depends mostly on our income. Banks usually restrict the loan amount so that your EMI is not more than 40-50% of your monthly income.
Ans: For most lenders, the tenure of a personal loan ranges from 12 months to 60 months. Some allow flexible repayment tenures to make it easy for you to pay off your outstanding dues.
Ans: Yes. You can partially or fully prepay a personal loan before the end of its tenure. However, many lenders take a prepayment charge for this facility.
Ans: You can take the following steps to improve your personal loan eligibility:
– Reduce your reliance on borrowings to improve your credit score
– Applying with a co-borrower
– Paying credit card dues and loan EMIs on time
Ans: KYC documents like PAN Card, Aadhaar Card, Voter ID Card or Driving Licence
– Age proof
– The last salary slip for 3 months and Form 16 (for salaried)
– Office proof, IT returns, and bank statement for 3 months (for self-employed)
Ans: The rate of interest levied on loans with floating interest rates varies due to several economic factors and other influences, such as:
– Government policies
– Repo rate
– Fiscal deficit
– Inflation rate
– Foreign and global interest rates
Hence, the EMIs on such loans also vary and such changes are conveyed to the borrower by the lender.
Ans: Yes, you are eligible for a loan if you can furnish your salary details during the EMI calculation. You are not required to provide or upload the salary slip to an EMI calculator website for calculation.
Before you go…
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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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