Just because of Unsecured Loan interest rate in personal loan vary between 12% to 20% which is quite higher as compare to other loans. And higher interest rate lead to high EMIs.
Equated Monthly Interest (EMI):
A fixed payment amount made by a borrower to a lender at a specified date. Equated monthly instalments are used to repay both principal and interest amount.
How EMI is Calculated?
EMI can be calculated manually by using mathematical formula or by using Excel sheet. Here are the formula for each.
Mathematical EMI Calculation Formula:
E is EMI
P is Principal Amount
r is rate of interest calculated on monthly basis.
n is loan tenure in number of months