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Personal Loan EMI Calculator

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Personal Loan Loan EMI Calculator
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Personal Loan EMI Calculator Details

Personal Loan EMI Calculator

If you are banging your head on wall thinking how to manage your personal finances and enhance your lifestyle then here we are with a way out: Personal Loan. Now if you are still in confusion whether to go for a loan or not then here we have another way out that is EMI calculator. With EMI Calculator you can easily get the idea of how to manage your personal finances. Surviving in such economy like India, it is not an easy task to have a smooth and stable financial status. But if you are well equipped with market information and financial calculations then it will be much hassle free for you to take a stable financial decision to enhance your personal life.

Loans for Any Personal Use

Personal Loan is basically a handful of money that you borrow from your lender to upgrade your lifestyle. Travelling, interior of your new home, a newly launched gadget or a grand wedding – anything that enhance your personal life in any shape can be financed with easy personal loans. Banks and Non-Banking Finance Corporations provide personal loans in easy terms from minimum of ₹50,000 to ₹5,000,000 and more for a specific period of time. You can avail the loan for any personal purpose like mentioned here.

Unserstanding the Personal Loan EMI

Like all other loans like Home Loan, Car Loan, Business Loan and such one has to repay the loan amount to the lender in case of personal loan as well. This type of loan that is used for personal activities have shorter tenure than that of other loans like home, car or business. Mostly within 5 years the customer has to repay the loan amount including the interest payment.

EMI that is equated monthly instalment is a amount of money that a customer who is availing personal loan has to pay to his / her lender every month. It is a fixed amount of money that is calculated in the beginning of the loan depending on three basic variables, loan amount, rate of interest and tenure of the loan. The tenure of the loan depends on the amount you are availing and the EMI will be calculated on the basis of the tenure.

Using Personal Loan EMI Calculator

To calculate personal loan EMI we need to follow this simple formula. The formula consists of three mentioned variables that are how much money you are obtaining at which rate of interest and for how long. Let us assume a customer of us avails loan amount of ₹100,000/- at the rate of 14% interest for 1 year. The total amount payable after a completion of the tenure will be ₹206,983/- including the interest payment and processing fee of 2% charged by the lender. The EMI will be same until you repay the entire amount to your lender.

Formula to Calculate Personal Loan EMI

EMI = P.i.(1+i)^n / {(1+i)^n – 1}


  • P is the Loan Amount (here it is ₹100,000/-)
  • i is the Rate of Interest (here it is 14%)
  • n is the tenure (that is 12 months)

Why should you calculate Personal Loan EMI beforehand?

You definitely need to calculate the EMI for your personal loan before you avail it. If you are a salaried employee then you have a fixed amount of earning every month, if you are an entrepreneur then you might have faced a no-earning month as well and vice versa. In either case you have to check on your daily expenses to survive. When you are taking a loan you are promising your lender to repay that money back within fixed time along with all other charges. So it is necessary to get an idea how much cash outflow will take place every month before you jump into such loan market.

Personal Loan Repayment

The first and the basic step towards your personal loan repayment begins with analysing and calculating the EMI towards your Personal loan. The very first thing one should do why opting a personal is analysing the requirement which includes how much exactly you need. The second thing which you should do is self-evaluating your capacity to repay the borrowed amount. One should be very clear about his/her capacity to repay the loan. The time period in which you can repay the borrowed amount without affecting much on your daily lifestyle. One can use the Personal Loan EMI Calculator above to calculate the estimated EMI in advance. Doing this will provide an idea about your EMI before you borrow. Doing this will also help you to plan your finances accordingly and manage it in a more efficient way

Repayment Options

Step-up Repayment

It’s a personal loan repayment option where a borrower can increase the EMI of their loan with the increasing tenure period. Step-up repayment option is best suitable for those borrowers who are confident about an increase in their income in the near future. People working in private sectors get a good increment with the growing experience and job switch hence step-up repayment or step- up repayment is favourable for this group of people as there is a guaranteed increase in income in near future. Most importantly opting for a step-up repayment save a lot on interest. This is possible as when the EMI increases the loan ends soon which can save a lot on the payable EMI.

Step-Down Repayment Option

It’s a repayment option where a borrower can decrease the loan EMI with the increase in the tenure period of the loan. This option is suitable for those who want to end their loan soon and become stress-free about the repayments in the future. Individuals who are close to retirement can opt for this option as with the retirement income reduces. Hence, being in service is the best time to repay the major part of the loan when you are earning enough. This repayment option is also suitable for people who have a good source of income currently and are not sure about a certain income in the future.

Balloon Repayment Option

Like a balloon, this repayment option allows the borrowers to pay lower EMIs in the initial years of your loan tenure. But this doesn't mean that balloon and step-up repayment are same, the difference to step up loans is that more than one-third of the loan amount is paid during the last installments of the tenure period.

Let us understand personal loan repayment and how much it will cost you with the help of an example:

Suppose you take a personal loan of ₹200,000 from Finance Buddha. You took this for a tenure period of 3 years. The personal loan is offered to you at an interest rate of 10.89% on a reducing principal. You are charged a processing fee of 2.5% of the loan amount which you can give directly at the time of loan processing or it can be also deducted from your loan amount at the time of disbursal.

Let's see the calculation which will tell you how much will your personal cost you:

EMI of your personal loan will cost you ₹6,500 per month.

Total payable amount in 3 years (Principal + Interest) = 36 * ₹6,500 = ₹234,000

Total Interest paid in 3 years for your personal loan = ₹34,000

Prepayment and part-payment of Personal Loans

Prepayments and part payments are always considered good for personal loans. In prepayment you pay the outstanding amount of your loan to the lender before the due date and close your loan before the fixed tenure period. This can be done in two ways. Either you pay the entire outstanding amount in one shot or you can pay the same in equal lump sum parts, instead of paying in EMIs. But it is important to check before taking loan from the lender that whether that lender allows prepayments and part payments or not because if you are planning to do so it is important for you to know all the terms and conditions before going for it. Many banks charge some amount as a pre closure charge for pre closing your loan.

Some of the advantage of pre and part payments are:

  • Reduction in the loan tenure and in EMI amount: You can pre-close your personal loan when you have enough money in your hand which is more than the outstanding personal loan amount. Pre-paying your personal loan takes away the burden of the EMIs which otherwise would have continued for the tenure of the loan.
  • Savings in the Interest Paid: When you prepay your loan, you actually save a lot money which you would have paid as interest to the lender throughout the tenure. You can use an EMI Calculator to see for yourself, the amount you would end up saving if you decide to pre-close your personal loan.
  • Increase in the CIBIL Score: As we all know that CIBIL Score is directly related to our borrowing history. If you are having a good CIBIL Score that means you are a good borrower and you were paying your EMIs on time and if you are having a bad CIBIL that means you were not timely with your EMIs. When you prepay any of your loan it increases your CIBIL with time as you are debt free which a very good thing. It gives a positive feedback about you. So in future, if you apply for a loan with any lender whether it is a bank or an NBFC this will definitely help you and you can get any loan easily.
  • Freedom from Debt: It is not a good thing to be burdened by loans all the time. If there is an option to come out of it, there should not be a second thought. Debt free life not only gives you access to more of your income (as you no longer need to pay EMIs), but also a relaxed mind, which you can then use to plan your budget for investment or buying an asset or whatever you wish to do.

Part-payment: How does it work?

Part repayment does happen in loan markets. You avail a loan and you know you need to repay the money in a fixed amount. As mentioned that for an entrepreneur it can be a no-earning month sometimes or sometimes over-earning month as they don’t have fixed salary date. In that case if you feel you have enough money to repay a large part of your loan amount prior to your tenure completion then that can be done easily. If you do so the tenure of your personal loan will come down and on the other the interest payment will be less as the interest is calculated on the basis of principal amount that is left unpaid. You can easily compare and then apply for the personal loan you need with the help of our EMI Calculator.

What happens when borrower does not repay the personal loan?

As we know personal loans are unsecured loans and hence no guarantor or collateral is required. In case if borrower do not repay his/her personal loan the bank can’t recover the outstanding amount from the guarantor as they don’t have this option. The action which can be taken in this situation varies from lender to lender which they have already mentioned on the loan agreement. Some lenders can take legal actions while some will give a chance to settle it by paying amount which would be more than the outstanding principal amount and less than the total outstanding amount including the interest rate.

One of the fact is, the credibility of the borrower will definitely reduce if he/she don’t pay the EMIs which will make their future lending difficult. As any lender before lending will surely check for the CIBIL score and as the applicant was defaulting with the personal loan EMIs it has reduced a lot.

What to do if borrower is unable to repay the personal loan?

Tough time can come in anybody’s life and financial cash crunch may happen. During this time it becomes difficult to repay the personal loan. In this case a borrower has two options-

  1. Go for a Refinance: when you can't repay your personal loan it may lower your CIBIL and even the lenders can go for a legal action. To avoid this situation go for a refinance and take another personal loan to repay the outstanding amount of your previous personal loan. When you go for a refinance try to search for a lender you can provide you a personal loan with low interest rate as compared to that of your first personal loan. In this way you can save a bit and will also come out from out debt and burden.
  2. Debt Settlement: when you are unable to repay your personal loan then debt settlement is an option to you in which you can request your lender to lessen the outstanding payable amount. In this way somewhat your burden will reduce and you can manage to pay off the outstanding negotiated amount.
Personal Loan Frequently Asked QuestionsView All

What options do I have to pay my EMI`s.?

You can use any of the following to pay your EMI a. Standing Instructions: Automatic Debit from your Axis bank accounts. b. Post dated Cheques c. Electronic Clearing system: Automatic Debit at the end of monthly cycle from your bank accounts other than Axis Bank.
Not necessarily only if you continue to pay the EMI`s on time. Kindly update your loan manager about any such change so that the manager can manage your loan better.
Not necessarily only if you continue to pay the EMI`s on time. Kindly update your loan manager about any such change so that the manager can manage your loan better.
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