Personal Loan

Step By Step Process to Calculate EMI for Personal Loan


EMI stands for equated monthly installment. It represents the monthly payment amount made towards your loan principal. This figure depends on the amount of money borrowed, the interest rate, and the tenure of repayment. Calculating your EMI can be an intimidating process. Thanks to technology, there are now many tools that can do it for you.

Use our EMI calculator below to easily calculate EMI for personal loans as well as other parameters such as interest rate, loan amount, repayment period, and more!

How to Calculate EMI for Personal Loan?

An EMI calculator is a tool that helps you understand the monthly cost of your loan. Simply plug in numbers like the interest rate and duration of the loan into the calculator. It will tell you how much you need to pay each month. This is known as an “equated monthly installment” or EMI. 

An EMI calculator can help you compare different personal loan rates in India, terms, and fees. It also lets you try out different situations, like switching from a variable-rate loan to a fixed-rate loan or changing the length of your loan.

Things Needed While Using an EMI Calculator

Although there may be a few more considerations, most Indian banks follow several guidelines that prospective borrowers can utilize when they apply for a personal loan. You can use the personal loan EMI calculator to compute EMI. With a little fiddling of numbers, you can find the correct EMI value, the lesser of which is generally better.

Here are the numbers you need to calculate EMI for personal loan:

#1 Principal Loan Amount

The first thing you need is the principal amount of your personal loan. In other words, the amount of money that was borrowed in order to take out the personal loan.

#2 Interest Rate on Your Personal Loan

You need to know the interest rate charged by banks on personal loans. This can be found on your bank’s website, or you can call them and ask directly. If not, then search online and compare personal loan rates in India across different banks.

#3 Loan Tenure

Loan tenure refers to the time period over which you will repay your loan. Usually, it ranges from 3–10 years, but it can be as long as 20 years.

To calculate EMI for personal loan manually, you need to enter all the numbers in the EMI calculator. The formula is as follows:

EMI = P.r (1+r)n((1+r)n-1)


EMI = equated monthly installment

r = rate of interest

P = Principal loan amount 

n = Tenure 

Different Methods to Calculate EMI for Personal Loans 

There are three different methods to calculate EMI for personal loan

Calculate EMI for Personal Loan Manually

Step 1: You just need to know the principal loan amount, the interest rate at which you borrow money, and the tenure of the loan. 

Step 2: Enter all the values in the EMI formula. 

EMI = P.r (1+r)n((1+r)n-1)

Step 3: Get the result. The final result is your EMI, which you need to pay on a monthly basis. 

Personal Loan EMI Calculation on MS-Excel to Calculate EMI for Personal Loan

In MS Excel, there is a built-in function called PMT, which uses the same three variables but in a different notation. With little to no expertise in MS Excel, anyone can use this tool as there are only three variables (NPER, RATE, and PV).

Here is the formula you need to input into Excel



R= interest rate

NPER= number of periods

PV= present value of your loan

Using a Personal Loan EMI calculator

It is one of the easiest ways to calculate EMI for personal loan

Step 1: Open the calculator. 

Step 2: Enter the required details, like the principal amount, rate of interest, and tenure. 

Step 3: Click on “calculate.”

On the screen, the calculator will immediately show you how much EMI you need to pay on the personal loan, along with the interest rate.

Let’s take two examples to understand this better:

Example 1: As a salaried person, you borrow a loan from HDFC Bank. The loan you want to borrow is INR 100,000 for 3 years. The HDFC bank gives you this loan at an interest rate of 10%. So, calculate EMI for personal loan that you pay as follows



  • Principal loan amount: INR 1 lakh
  • Tenure: 3 years
  • Interest Rate: 10%

Let’s put the value in the formula

EMI = P.r (1+r)n((1+r)n-1)

Hence, the monthly personal loan EMI is INR 32,267. Here, the total payable interest is INR 1,61,619.

Example 2: Mr. Sharma wants to take a personal loan from SBI Bank for 5 years. The total amount he wants to borrow is 1 lakh rupees, and the interest rate on this loan is 12%. How much EMI does Mr. Sharma need to pay every month? 



  •  The principal amount is INR 1 lakh
  • SBI gives personal loans at a 12% interest rate
  • The loan amount’s tenure is 5 years

Put all the values in the formula

EMI = P.r (1+r)n((1+r)n-1)

The EMI amount is INR 2,224 and the total interest value is INR 33,467.

The Bottom Line

Estimating your monthly loan installments with a personal loan EMI calculator can help you assess the affordability of a loan. This gives you peace of mind before deciding to apply for one.

The first thing to do to calculate EMI for personal loan is to use an EMI calculator. This will help you find out how much your loan installment will be, along with the principal amount and interest rate.

To learn more about personal loans, you can check out the Piramal Finance website.