Factors involved in calculations of Personal Loan EMI

Personal Loan EMI


When we talk about any loan, the first thing that comes to your mind is EMI. What is EMI? EMI is equated monthly installments you must pay monthly for the loan amount. Earlier, the borrowers made the EMI calculation manually.

But the results from manual EMI calculations are not accurate and are a complete waste of time. Today, it is very easy to calculate the accurate EMI of any loan. Thanks to the personal loan EMI calculator, that makes it possible to calculate the accurate EMI of a personal loan in a few clicks in very less time.

This article provides complete information about EMI, the EMI calculator and the factors considered while calculating the EMI.

What does the EMI consist of? 

EMI consists of two parts, principal amount and interest amount. Usually, the interest of any loan is added to the principal amount that is spread across the loan tenure.

To calculate the EMI, the loan amount is added to the interest amount and is split equally over the period, known as loan tenure.

Factors involved in EMI calculation of personal loan

Here are some important factors to consider while calculating the EMI of a personal loan.

  • Loan amount

The loan amount is the amount you take from a lender or bank in the form of a personal loan. The loan amount is considered a primary factor in deciding the monthly installments. As the loan amount of the borrower increases, the applicable EMI will also increase.

  • Interest rate

The bank charges interest on your loan. The financial institution or bank determines the interest rates after evaluating your credit history, income, repayment capacity, etc.

If any factors do not support your loan application, the bank possesses a higher interest rate or even rejects your loan application.

  • Tenure 

Tenure is the time taken by the borrower to repay the whole loan amount, including interest. Tenure is the factor that greatly affects the EMI. As the borrower, you should understand that any increase in tenure means you must pay more interest.

Does the EMI of a personal loan change with loan tenure?

Here we will determine whether the EMI of personal loans changes with loan tenure.

  • In the case of a floating interest rate

The interest rate keeps changing if you choose an online personal loan with a floating interest rate. And when the interest rate change, the EMI amount will also change.

  • If you prepay the loan amount

If you prepay the loan amount during the loan tenure, EMI will change. After the prepayment, the principal amount of the loan will go down, and the amount of interest will change as per the new principal amount.

  • When you choose the progressive EMI option

Some lenders only provide the progressive EMI option to repay the personal loan. The borrower must pay the fixed EMI for a certain period. After the term completion, the borrower must pay a larger EMI.


The EMI calculation of a personal loan is important. It helps the borrower easily repay the loan without falling into debt.

Author: admin

Leave a Reply

Your email address will not be published. Required fields are marked *