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Medical Loan EMI Calculator

Personal loans are unsecured loans offered by multiple banks such as ICICI bank, Axis Bank, HDFC bank, Kotak Bank, etc as well as multiple NBFC’s such as Bajaj Finserv, Tata Capital, Fullerton, etc. The loans are repaid in the form of Equated Monthly Instalments (EMI’s) also know an Equal Monthly Instalments. EMI’s for personal loans are usually fixed for the tenure of the loan. Each EMI repaid has a certain Interest component and a certain principal component. Usually the initial EMI’s have a higher interest component in comparison to the later EMI’s. The reverse holds good for the principal amount where the initial EMI’s account for a lower principal amount in comparison to the later EMI’s. EMI option is available to payback different kinds of loans such as personal loans, home loan etc. EMIs are different from variable installments where the borrower can pay the lender an amount greater than the fixed monthly instalments.

EMI Math

It’s a good idea to calculate your monthly installments payable when you are looking to advance personal loan. It helps you to decide on the right option among various offers based on your financial commitments. You just need the basic information like loan amount, tenure and interest rate to calculate your EMI.

Below is how the EMI is calculated with the formula:

(Principal Amount * Rate of Interest * (1 + Rate of Interest)n/((1 + Rate of Interest)n - 1)

Rate of Interest denotes the monthly interest rate (i.e. the yearly interest rate divided by 12 months)
n denotes the loan tenure in months

Say that you need a personal loan of 700,000 for yearly interest of 12.5% for 60 months tenure
Principal Amount = 700,000
Rate of Interest = (12.5/100)/12 = 0.010417
n = 60

EMI = (700,000 x 0.010417) * (1 + 0.010417)^60 / ((1 + 0.010417)^60 - 1)
       =  15,749

Therefore the EMI is   15,749
Total Interest Payable is   2,44,913
(Principal + Interest) is   9,44,913

The main components of your EMI are the interest rate and tenure. If you get a personal loan with less interest rate, your EMI will considerably decrease. Again getting a better offer depends on the below criteria.

Self-Employed vs Salaried - Salaried Applicants have a better chance of getting lesser rate when compared to Self-Employed Applicants due to the stability of the income.

Company you work for – If you work in one of those top corporate companies, the chances of getting better interest rate are higher than the ones working with startups.

Your position in the company you work for – If you are one among the top management, you might get better offers due to the status attached.

Your Residence – You will get better interest rates if you are staying in your owned house vs rented house.

Your Credit History – If have a good credit score and history of repaying any earlier loans on time, increased chances of you getting a better rate.

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