When you apply for personal loan, you are liable to repay the money in the form of equated monthly instalments, commonly known as EMIs. Basically, it is the monthly amount payable on your loan till the completion of the loan tenure. 

To calculate personal loan EMI, you need to be well versed with the following three main variables:

Principal loan amount:

It is the total amount of money that you have borrowed as your loan. 

Interest rate:

It is the rate of interest the bank charges to the borrower. It is expressed as a yearly percentage of the outstanding loan amount. The personal loan interest rate can be negotiated by the borrower based on his/her eligibility.

Loan tenure:

It is the period or loan term expressed in the number of years. It can be understood as the total time across which the personal loan repayment is distributed.

Additional Read: How to Choose the Best Personal Loan for Needs?

So, how does one manually calculate the EMI?

Personal Loan EMI Calculator

a. To calculate loan EMI manually, you need to use the following formula:

EMI = [P x R x (1+R) ^N]/ [(1+R) ^N-1]

P here is the principal amount, R the rate of interest charged, and N is loan tenure.

Enter the values of P, R and N in the above formula to compute your monthly EMI.

b. For Personal Loan EMI calculation on MS-Excel:

MS-Excel comes with an inbuilt function called PMT. It makes use of the same three variables discussed above but with a few differences in notations. Anyone with an elementary understanding of MS-Excel can easily use this tool. The variables are NPER, RATE and PV. 

Here is the formula that you would need to input in Excel:


Here, R stands for rate of interest, NPER is the number of periods and PV denotes the present value of the loan amount.

Let’s understand the formula with the help of an example:

Rahul takes a personal loan of Rs 10 lakh at an interest rate of 12% per annum. He has to pay it back in the form of EMIs within five years.

The PV would then be 10 lakh; rate would be 12%/12 months = 0.01; NPER would be 60 i.e., 5*12 months = 60 months.

Therefore, this will be the formula that you input in Excel: PMT (0.01, 60, 1000000).

The result of this computation would appear in red color (negative) highlighting Rahul’s total outflow.

While you should not face any difficulty calculating EMI manually or using MS-Excel, there are online tools available for this calculation as well. For instance, Tata Capital comes with a pre-designed online personal loan EMI calculator that simplifies the process of EMI calculation. With this calculator, all you need to do is enter the loan amount you are looking for and then evaluate the options based on the monthly EMI liability that you would be comfortable with.

With flexible loan tenure and easy repayment options, Tata Capital can be your ideal lender for an instant personal loan.

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