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### How to use this EMI Calculator?

• Use the slider for Selecting Loan Amount
• Select the Loan tenure in Months using slider
• Move the slider and select the Interest Rate
• Recalculate your EMI anytime by changing the input sliders
• EMI will be calculated instantaneously when you move the sliders.

## What is Personal Loan EMI Calculator?

Personal Loan, also known as consumer loan, is a type of loan which is normally unsecured in nature, and is taken by an individual for a short period of time. It is basically taken to meet any financial need like family expenditure, home revamp, holiday or maybe for the procurement of any amenities either for personal or for commercial use and others. A personal loan is preferred to other loans as it requires minor documents, provides flexibility of usage and takes comparatively less processing time. Unlike other loans, it usually has a shorter repayment tenure ranging from 1-5 years. An EMI calculator is a quick and simple solution to pre-plan and balance your inflow and outflow of money so that you don’t run short of money at any point in time. An EMI calculator is a formula box with 3 sliders, namely-Loan Amount, Loan Tenure, and Interest Rate. Once you fill in the details, the calculator will tell you the EMI (Equal Monthly Installment) amount that you will need to give to the bank every month, to repay your debts.

## Formula for calculating EMI

You can calculate your EMI Amount with the help of the mathematical formula given below: EMI Amount = [P x R x (1+R)^N]/[(1+R)^N-1] where P, R, and N are the variables.  This also means that the EMI value will change every time you change any of the 3 variables. Let’s discuss these 3 variables in detail. ‘P’ stands for the ‘Principal Amount’. The principal amount is the original loan amount given to you by the bank on which the interest will be calculated. ‘R’ stands for the rate of interest set by the bank. ‘N’ determines the number of years given for the repayment of the loan. Since EMIs are paid every month, the duration is calculated in the number of months. So, if you take a Personal loan of Rs. 10 lakhs with an average interest rate of 15 %, the approximate EMI will be: P = 10 lakhs, R = 15%, N = 2 years or 24 months [P x R x (1+R)^N]/[(1+R)^N-1] EMI = [1000000 x 15/100 x (1+15)^24] / [(1+15/100)^24-1] EMI = Rs. 48,487

## How does an EMI Calculator work?

An EMI Calculator is a handy tool that calculates the monthly amount payable to the lender (Bank). To calculate the EMI applicable on your loan amount, you need to use the sliders above and adjust the values for principal Amount (P), Time duration (N), and Rate of interest (R). Follow these steps to calculate your EMI Amount:
• Use the slider for Selecting the Loan Amount
• Select the Loan Tenure in Months using slider
• Move the slider and select the Interest Rate
• Recalculate your EMI anytime by changing the input sliders
• EMI will be calculated instantaneously when you move the sliders.
Principal Loan Amount: This is the original amount lent to you by the bank/lender. The loan amount will depend on your need and the purpose of the loan. Higher the loan amount, higher will be the EMI. Tenure: The tenure of a loan refers to the total time given for the repayment of the loan. Since the repayment is done every month, the tenure is calculated in months and not in years. So, a tenure of 2 years is equal to 24 months. The Rate of Interest: This is the rate at which the interest is charged on the principal loan amount. The interest rate varies depending on the type of loan taken and the lender (bank) from which the loan has been taken. The rate of interest has a direct bearing on your EMI amount; hence, it is important to compare interest rates across banks before opting for a loan.

## Factors Affecting Personal Loan EMI

There are several factors which affect the EMI calculation. Since the EMI broadly depends upon the principal amount, tenure, and the rate of interest. Any change in these variables can cause a change in the EMI amount. Prior to this, one should know that there are many other factors upon which the Personal loan (amount) granted may vary. For instance, your credit score. The more the credit score the better chances of getting the Personal loan (amount). Hence, you can manage your credit score by paying your credit card bills on time and keeping the credit card balance low. Besides, there are other criteria upon which the loan amount granted may differ from bank to bank, like:
• Income Proof
• Investment statements
• Stable Employment history
• Housing history
• Debt-to-income ratio
• Social media

## Benefits of Personal Loan EMI Calculator

Personal Loan EMI Calculator is a hassle-free generic tool where you don’t have to do anything except entering the 3 values. Coming to the benefits, it is like you are aware of what you are getting into. You have a crystal-clear idea of the loan amount, the tenure, and the interest you will be paying. This will help you in planning your budget beforehand. So, to ease all your problems and arrange a better flow of money and on time, Cleartax offers ELSS which gives you a tension free amount as and when required.