Complete Guide on Personal Loan EMI calculator

You can take a personal loan for a number of reasons – for a wedding, medical expenses, home improvements among other things.

Unlike house and car loans, personal loans can be used for pretty much everything.

How to calculate EMI for personal loan’ is a common question that many people face before applying for a loan. Before that question is tackled, a basic overview of personal loan and EMI is given below.

Personal loan EMI

EMI is known as Equated Monthly Installment. This is the amount that a person who has taken a personal loan needs to pay throughout the tenure of the loan to repay the total loan amount.  

Calculating personal loan EMI is very simple using an online personal loan EMI calculator.

Personal loan EMI calculator

It helps you calculate how much personal loan EMI you need to pay every month by taking several inputs which will be discussed below:

Inputs that a personal loan EMI calculator needs:

  1. Loan amount
  2. Tenure of the loan
  3. Interest rate
  4. Processing fee of the loan

The calculator may also ask you if you want to opt for pre-payment or not. After you input all the information correctly in the personal loan calculator, you can see how much EMI you need to pay every month.

The benefit of using a personal loan calculator is that you can change the parameters to arrive at an EMI that you are comfortable with.

Some banks provide an EMI calculator in the form of personal loan EMI calculator Excel sheet that you have to input various fields to arrive at the EMI payable every month.

Benefits and features of a personal loan EMI calculator:

  • Accuracy:  Calculating EMI on pen and paper leaves a lot of room for error. If you make a mistake, that can affect your decision while taking a personal loan. With the personal loan EMI calculator, you can perform the same calculation accurately within seconds.
  • Save time: Along with accuracy, using a personal loan calculator also saves a lot of time because you can do multiple calculations at once.
  • Easy comparisons: You can vary the inputs as many as times as you please and compare different interest rates and which bank may be the right fit for you. Doing this calculation by hand is a tedious task and may result in error. With a personal loan calculator, it is easy to compare different plans.
  • Fit loans to budgets: The monthly EMI is definitely a cause for concern as it is another added expenditure along with other expenses. Using different permutations and combinations, you can arrive at a number that you are comfortable with.
  • Endlessly adjustable: You can redo the calculations as many times as you like. This is not possible to do by hand.
  • Processing fee accounted for: While calculating the EMI, the processing fee is also a parameter that needs to be considered. The calculator will let you know how much you need to pay the bank.
  • Tell you more than just the EMI: The calculator can do more than tell you how much EMI needs to be paid. You can also get a graphic representation of the loan along with an amortisation table too.



  1. How to calculate EMI for personal loan?

There are two ways you can calculate EMI. One is to do the math by yourself or you can use a personal loan EMI calculator.  Using the personal loan calculator is very easy. The calculator may ask you to input the values manually or use sliders to indicate the value. The calculator analyzes your request within seconds to arrive at the EMI payable every month. You can vary the inputs to change the EMI and arrive at a number that you are comfortable with.


  1. How does the personal loan EMI calculator work?

The calculator asks for various inputs such as-

Loan Amount:   Here you need to enter the loan amount. This is the amount that you intend to borrow.

Interest Rate: This rate indicates the interest charged on the loan amount.

Tenure: The duration of the loan period indicates tenure.

Processing Fees: Banks charge a processing fee for personal loans.

There are 2 formulas used to calculate the EMI for personal loan. The first one calculates the monthly interest and the second one calculates the EMI.

  • Calculating the monthly interest rate: The first step involves converting the annual interest rate to a monthly one. To do that, the following formula is used. Interest rate/12

So, for example if the interest rate offered to you for your personal loan is 12% per annum               then your monthly interest rate will be calculated as so: 12/12 = 1

That means that the monthly rate of interest will be 1%.


  • Calculating the EMI: This is a far more complicated step. The loan amount, tenure and interest rate all need to be factored in. The loan tenure is not considered in years, but in months.

To find the EMI the following formula is used: E = P x r x (1+r)^n/((1+r)^n – 1) Here:

              • E is the actual EMI
              • P is the loan
              • r is the monthly interest rate
              • n is the tenure of the loan


  1. What do the results of the EMI calculator mean?

EMI: You get to see your monthly EMI that you need to pay to repay the loan.

Break-up of the total amount: The calculator also tells you the total sum that you need to repay including interest and processing fees.


  1. How much EMI should you pay?

As a general rule, the EMI should not be more than 40% of your monthly income.


  1. What is the tenure of the personal loan?

The tenure of a personal loan can be from anywhere between 1 and 5 years.


  1. How much processing fees do banks charge on a personal loan?

Banks can charge anywhere from 1 to 5% of the loan amount to process your loan.