How to Calculate Your Loan Monthly EMI & Costs
  Given the responsibility that comes with borrowing, doing so in a planned and structured manner is key to safeguarding your financial well-being. This includes knowing exactly how much you require to borrow and then deciding up on other factors like the lender and the length of the repayment tenor. By drawing up an estimate of the amount required to meet your goal and using online tools like the personal loan calculator for eligibility, you can settle on the loan amount effectively. You can then proceed to compute your loan EMI amounts and total interest outgo to plan for repayment effectively. To learn how to calculate your personal loan EMI amount, here are 3 ways in which you can go about it.

By using the mathematical formula and calculating it manually

One way to calculate your personal loan EMI amounts is to do so manually by using the EMI formula. EMI = [P x R x (1+R)N ]/[(1+R)N-1] So, for a loan of Rs.15 lakh and a tenor of 48 months, the EMI calculations using this formula would be as follows. P= 1500000 R= 15%/12 = 0.0125 N= 48 (1+R)n= 1.8153548 EMI= (1500000 * 0.0125 * 1.8153548)/ (1.8153548 – 1) EMI = 41,746

By using Microsoft Excel and entering values for the PMT function

Calculating the EMIs can also be done with the PMT function in Microsoft Excel. While the program does have an EMI function, the PMT function is one that will help you get the results you’re looking for. The function you need to enter in the cell is: =PMT(RATE,NPER,PV,FV) Here, all the elements within the parenthesis are variables and must be assigned values. These correspond to the loan particulars and below is a breakdown of the variables. RATE: Interest rate applicable on the loan. The value for this variable must be converted by dividing the rate by 12. For example, 14% annual interest is 14%/12 = 0.0116666. NPER: This is the number of EMIs to be paid over the tenor. You can get the value by multiplying the number of years into 12. For example, for a loan of 3 years, NPER is 3*12 which is 36. PV: This variable denotes the principal loan amount. Here, add the amount you want to calculate the EMIs for. FV: This variable denotes the balance remainder after the last payment. You may omit it and it will not affect the results. Now that you know how to get the values for these variables, consider this example. To get the loan EMI amounts for a loan of Rs.15 lakh with 15% interest rate over a tenor of 48 months, the values for the excel formula are: =PMT(0.0125, 48, 1500000) These will output the result as -41,746, which is the accurate EMI amount. (The negative sign indicates cash outflow.)

By using a personal loan calculator that is freely available online

Both of the above-mentioned methods require you to do some amount of manual calculation and this leaves room for error. To avoid this altogether, the best way to calculate your monthly instalments is to use a personal loan EMI calculator available online. This free tool is easily accessible on any lender’s website and to compute results,  simply enter values for the fields pertaining to loan. Here, the results are computed automatically, accurately and in an instant. On entering the Rs.15 lakh for the loan amount, 48 months for the tenor, and 15% for the rate of interest, the calculator displays Rs.41,746 as the loan EMI amount. Of all the ways to know your loan EMI amount, using a personal loan calculator guarantees you speed and accuracy as well as saves you time. So, be sure to take advantage of this tool before making any decisions and effectively plan for repayment to keep your outgo optimal and cost-effective. When it comes to taking a personal loan, consider the Bajaj Finserv Personal Loan as here you enjoy the benefit of competitive interest rates alongside a flexible tenor of up to 60 months. This quick personal loan is ideal for funding both small and big-ticket expenses as you can get approved for a sanction of up to Rs.25 lakh. To get started right away, check your pre-approved offer online by sharing basic details and get access to a customised offering!

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