Personal Loan

How Can You Calculate EMIs On Personal Loans In Easy Steps?


It is important to calculate personal loan EMIs when taking out a personal loan. EMIs are equated monthly instalments, and it is the amount of money you pay each month to repay a loan. Knowing your monthly EMIs can help you plan your budget and make sure you can afford your loan repayments. Your personal loan EMIs are determined by the amount of your loan, the interest rate and the repayment period of your personal loan.

If you are considering taking out a personal loan and want to know how to calculate the loan’s monthly payments or EMIs, you must understand and learn the basics of EMI calculation, including what factors are used in the calculation and how to use an EMI calculator to find out the exact amount of your loan repayments. With this information, you will be able to make an informed decision about your personal loan and your financial capability for repayments.

What Is a Personal Loan

A personal loan is a type of loan that is given to an individual for personal use. It can be utilised for many purposes, such as consolidating debt, financing a major purchase, medical emergencies or meeting unexpected expenses.

Personal loans are usually unsecured, meaning the borrower does not have to provide collateral to receive a personal loan. The personal loan amount and interest rate will depend on the borrower’s creditworthiness and other factors. Personal loans are typically repaid in monthly instalments over a set period of time.

Eligibility Criteria For a Personal Loan

The eligibility criteria for getting a personal loan vary from lender to lender, but typically include the following: 

  • Minimum age of 18 or 21 (depending on the lender) 
  • Steady income (either salaried or self-employed)
  • A good credit score
  • No recent bankruptcies or defaults 
  • A valid form of identification (such as a driver’s license or passport) 
  • A bank account in your name

How To Calculate Personal Loan EMIs

Here are some factors that will help you calculate personal loan EMIs:

  • Loan Amount: The loan amount has a direct impact on the EMI amount. A higher loan amount will result in higher EMIs and a lower loan amount will result in lower EMIs. 
  • Interest Rate: The interest rate applicable on the personal loan will determine the amount of interest the borrower will pay in their EMIs.
  • Loan Tenure: The tenure of a personal loan also determines the amount to be paid in EMIs. For instance, longer loan tenures will result in a lower EMI amount to be paid. 

These are some other charges that personal loan borrowers may have to take into consideration:

  • Processing Fee: A processing fee is charged by the lender to process the loan application. This fee may be included in the EMI amount.
  • Prepayment Penalty: Some lenders may levy a prepayment penalty if the borrower prepays the loan amount before the end of the loan tenure.
  • Additional Charges: Some lenders may charge additional fees like administrative fees, documentation fees, etc. and these fees may be included in the EMI amount.

How To Calculate Personal Loan EMIs Using an Online Personal Loan EMI Calculator and Other Methods

Here are three easy ways to calculate personal loan EMIs in simple steps:

Calculate EMIs on MS Excel

  1. Open a blank MS Excel workbook. 
  2. Enter the following labels in the first row of the worksheet: loan amount, interest rate, number of payments and payment amount. 
  3. Enter the loan amount, interest rate and the number of payments in the cells below the labels. 
  4. Click on the cell where you want the payment amount to appear. 
  5. Go to the ‘Formulas’ tab and select the ‘Financial’ category. 
  6. Click on the PMT function. 
  7. Enter the values for the loan amount, interest rate and the number of payments in the dialogue box. 
  8. Click OK. 
  9. The payment amount will be displayed in the cell you have selected.

Calculate EMIs using a Mathematical Formula

  1. Determine the principal loan amount borrowed (p). 
  2. Determine the annual interest rate (r). 
  3. Determine the number of payments or instalments (n). 
  4. Calculate the periodic interest rate (i) by dividing the annual interest rate by the number of payments per year: i = r/n. 
  5. Calculate the monthly payment (M) using the following formula: M = Pi(1+i)^n / [(1+i)^n – 1]. 
  6. Calculate the total amount paid (T) by multiplying the monthly payment (M) by the number of payments (n): T = n*M. 
  7. Calculate the total interest paid (I) by subtracting the principal amount (P) from the total amount paid (T): I = T-P.

Calculate EMIs Using an Online Personal Loan EMI Calculator

  1. Go to an online personal loan EMI calculator website. 
  2. Enter the amount of the loan, the interest rate and the tenure for repayment. 
  3. Click the ‘Calculate’ button to get the EMI amount. 
  4. Review the details of the EMI such as the monthly payment, total interest payable, total amount payable and the amortization schedule. 
  5. Be sure to review the fees and other charges associated with the personal loan


There are different methods to calculate personal loan EMIs. To get started, it is important to understand the three important components that determine what your personal loan EMIs will be: the loan amount, the interest rate and the tenure or repayment period. Once you have this information, you can use the methods described above to determine how much you will be required to repay each month. One of the easiest methods is to use an online personal loan EMI calculator which is free, available online and produces accurate results. Once these calculations are made and understood, you will be able to determine whether you are financially able to repay a personal loan and can adjust the loan amount if required.

By understanding the calculations and other terms and conditions of a personal loan, you can make an informed decision on taking a personal loan or not. For more information on how to calculate personal loan EMIs, visit the Piramal Finance website where you can find more helpful and informative articles like this one!