1. What is Personal Loan EMI?

EMI (Equated Monthly Installment) is the fixed payment amount a borrower makes to a lender at a specified date each calendar month. For personal loans in India (e.g., ICICI at 10.85% p.a.), EMIs consist of both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (₹)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Loan term in months
• \( PMT \) — Monthly EMI payment (₹)

Explanation: The formula accounts for compound interest and spreads payments equally over the loan term.

3. Importance of EMI Calculation

Details: Calculating EMI helps borrowers understand their repayment obligations, compare loan offers, and plan their finances accordingly.

4. Using the Calculator

Tips: Enter principal amount in ₹, annual interest rate (e.g., 10.85 for 10.85%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical interest rate for personal loans in India?
A: Rates vary but typically range from 10% to 24% p.a. depending on credit score, lender, and loan amount.

Q2: How does loan tenure affect EMI?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures mean higher EMI but less interest overall.

Q3: Are there prepayment charges?
A: Many Indian lenders allow partial/full prepayment after 6-12 EMIs, often with 0-5% prepayment charges.

Q4: What factors affect personal loan eligibility?
A: Credit score, income, employment stability, existing debts, and relationship with the lender.

Q5: How can I reduce my EMI burden?
A: You can negotiate a lower rate, opt for a longer tenure, or make part-prepayments when possible.