Everything you need to know about Personal Loan EMI Calculator

Updated on: 18 September 2023

Published on: 16 August 2021

A Personal Loan EMI calculator is a digital tool that helps you compute your monthly instalments instantly. This personal loan calculation method is a lifesaver as it lets you compare various loan offers with ease before you apply for a personal loan. 

In fact, it simplifies loan planning and helps you make smart financial decisions. 

Read on to learn more about the importance of using an EMI calculator.

Why is an EMI Calculator important when opting for a Personal Loan?

The primary use of an EMI calculator is to give you an estimate of the monthly instalment payable until your loan tenure ends. As such, it can help you plan your finances better and borrow within your budget. 

With the help of an EMI calculator, you can decide your personal loan terms, such as:

• The amount you need to borrow
• Tenure of the loan

What are the various factors affecting a Personal Loan EMI?

Before diving deeper into the process of using an EMI calculator, you need to be aware of different factors that influence the EMI amount. 

Here are some of them:

• Principal Loan Amount
  This is the amount that you borrow from the lender. Your EMI is directly affected by this factor. If the loan amount increases, so do your EMIs.

• Applicable Interest Rate
  Similar to the principal amount, this factor also directly influences your EMI amount. As your interest rate goes higher, your EMI will also increase. 

• Loan Tenure
  Your EMI amount decreases when the duration of your loan increases. You can use an EMI calculator to make these calculations instantly. 

Apart from these aforementioned factors, another crucial factor affecting your loan EMI is the personal loan calculation method used by the respective lender. 

Here are the two types of interest computing methods used.

1. Flat Balance Method of Interest Calculation
   In this method, the lender calculates the interest on the total principal amount. Here, your EMI stays fixed throughout the tenure of your loan.

2. Reducing Balance Method of Interest Calculation
   In this method, the lender calculates the interest only on the outstanding amount. As you continue paying your EMIs regularly, your principal amount reduces. This reduces your EMIs eventually. Currently, this is a popular method used by the majority of lenders, including Fibe.

What are the advantages of using a Personal Loan EMI Calculator?

Here are some benefits you can enjoy when you calculate your EMIs using a personal loan EMI calculator.

• Helps Compare Lenders
  If you have a specific requirement, you can compare the interest rates offered by various lenders to choose the best offer. By changing the interest rate and keeping other values fixed, you can compare EMIs. This way, you can zero in on a lender providing an affordable option.

• Saves Time on Calculations
  Computing your EMIs using an EMI calculator is instant. Simply input the values and check the results. There are no manual calculations. 

How to use an EMI Calculator for an Instant Personal Loan? 

Fibe’s Quick Instant Loan EMI calculator is a reliable personal loan calculation method to determine your EMI within minutes.
Now, to use the EMI Calculator, you have to follow only three simple steps. 

• Enter the desired personal loan amount
• Then add the interest rate offered by the lender
• Choose a suitable tenure for which you can comfortably pay the EMI

After entering all parameters, you will get the EMIs you must pay over the chosen repayment window. You can tweak the values until you arrive at the most affordable EMI option.

How to calculate processing fees for a Personal Loan?

Processing fees on a personal loan are a fixed value decided by the lender, which can be a percentage of the total loan amount. With Fibe, you pay only 3% of your loan amount as a one-time processing fee. 

Hence, it is important that you know all your personal loan details and read the fine print when availing a personal loan. 

For instant cash loans of up to ₹5 lakhs, you can rely on Fibe and get the funds you need completely online. Enjoy a quick and easy financing solution, with interest rates starting at 2% per month. To get started, download the Personal Loan App or visit our website and register today. 

FAQs on Everything to Know About Personal Loan EMI Calculators

How do lenders calculate the EMI for a personal loan?

Lenders calculate the EMI on a personal loan by considering the principal amount, the interest rate applicable and the tenure. 

What is the EMI calculation formula?

You can manually calculate your personal loan EMI using the following formula: 

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

Here,
P = Principal loan amount
R = Applied interest rate of your
N= Number of months

What are the factors affecting EMI?

The following factors affect your EMI amount: 

• Total loan amount
• Loan repayment tenure
• Interest rate

You must remember that a higher principal amount means a higher EMI. Similarly, the interest rate also directly affects your loan EMIs. On the contrary, longer repayment tenure reduces your monthly instalments but your interest outgo will increase.