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How To Calculate EMI and Interest Rate For Personal Loan

· Loan Calculator

A personal loan can be use for any purpose. No documents and no security makes it more easy to apply for a personal loan. But the one thing which Personal Loan doesn't have is a lower interest rate.

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:

Where,

E is EMI

P is Principal Amount

r is rate of interest calculated on monthly basis.

n is loan tenure in number of months

But not everyone is able to do such complicated calculation that's why banks and NBFCs offer online personal loan calculator so you can calculate your EMI easily.

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