Here’s How an EMI Calculator Can Help You Plan Your Repayment

If you are planning on taking a loan in the near future, one of the first things you need to plan out even before you apply for the loan is its repayment. The reason behind this advice is simple; from the moment the loan amount is delivered to your bank account, you are in debt, and thus you should make an active effort of reducing your debt by repaying on a timely basis, thus maintaining your credit score and subsequent creditworthiness.

Not only does planning your repayment beforehand help you in better planning your personal finances, but the process of doing it is immensely easy due to the number of email calculators available these days.

Thus, in today’s article, we will share with you everything you need to know on how using an emi calculator can help you plan your personal loan repayment.

Without further ado, let’s get started.

What Is an EMI Calculator?

One of the first things we need to understand is the meaning of an EMI calculator. In simple terms, an EMI calculator is an online tool which helps you plan the repayment cycle of your personal loan by taking into account your total loan amount, the interest rate being charged and the tenure the lender has extended to you.

These days, all you need to do to locate an EMI calculator is go on to your favorite search engine and type out “online EMI calculator”, and you will have multiple options in front of you. Choose any one you like, and after that, you can follow the steps mentioned below to calculate the repayment of your personal loan.

How to Use an EMI Calculator to Plan Your Repayment?

In order to plan your repayment using an EMI calculator, you can follow the steps outlined below.

  • Locate the designated area and enter your total loan amount, closely followed by the rate of interest being charged to you by the lender and the total tenure which has been extended.
  • Once you have entered these details, there will be a section which will ask you about the calculation frequency. In most cases, this is set to default at yearly intervals since most loan interest rates are calculated on an annual basis; however, you can tweak it to meet your exact requirements.
  • After this, click on Submit or Calculate, and you will be displayed both the EMI amount you are expected to pay every month, closely followed by the total amount you will repay (taking into account your interest amount).

Depending on the online EMI calculator you choose, the calculator might even display the complete loan amortization schedule, which means you will have complete details of the EMIs you are expected to pay until the end of the tenure of the loan.


Although using an online EMI calculator is fairly simple, there are, of course, a few prerequisites you should meet.

1. Calculation Frequency

Although most personal loans in India are calculated on a yearly basis, there might be instances where the calculation frequency is quarterly or monthly. Thus make sure that you check with the lender beforehand such that you can accurately calculate your repayment.

2. Type Of Interest

Along with the interest calculation frequency, another important factor which you should check in with the lender is the type of interest being charged. While most loans tend to arrive with a fixed interest rate, there might be instances wherein a variable interest rate or even a reducing balance interest rate may be charged. Thus make sure, you enquire of this from the lender beforehand as it will give you the opportunity to accurately calculate your EMI repayment.

Advantages of Using an EMI Calculator to Plan Your Personal Loan Repayment

The advantages of using an online emi calculator to plan your personal loan repayments are many, and some of the most significant ones are as shared below.

1. Plan the Future

One common shortcoming all of us share when taking out a loan is to be shortsighted in our approach, which invariably leads us to guesstimate the future and thus overestimate our ability to repay on time. On the other hand, by using an online emi calculator, we can accurately draw up a plan which captures the on-ground reality of our future financial commitments, thus allowing us the opportunity to plan ahead of time and be prepared.

As the saying goes, if we do not plan, we plan to fail, and nowhere it is more evident than in repaying a personal loan.

2. Maintain Your Credit Score

As a seasoned borrower, we are sure of the fact that you understand the significance of maintaining a good credit score when it comes to borrowing. No matter which lender you approach, one of the first things they will check is your credit score, and if it is not above 750, your chances of getting approved are far and few.

While there are multiple ways to ensure that you maintain a healthy credit score, one of the best is to plan your repayment ahead of time, such that you can set aside the EMI amount every month from your income and diminish the chances of a default.

3. Increase Chances of Approval

A rule of thumb every lender across the country follows is to lend you only 45% – 50% of your monthly in-hand income. What this means is simple; no matter which lender you approach, one common aspect they will ensure is that under no circumstances should your total EMI amount exceed 45% of your monthly in-hand income, and since all your data is present with the credit bureaus, lenders can easily take into account all your dues and calculate if you qualify for a loan or not.

Now that you are aware of the thumb rule used by lenders, you can reverse engineer it to see how much of an EMI amount you are most likely to be approved for, thus making you aware of the total amount you should apply for and subsequently get approved.

Related Links: Housing Loan EMI Calculator


At first glance, an online EMI calculator might appear to be a simple tool; however, if used correctly, it can prove to be highly advantageous to you, especially as a new borrower. So go ahead and make use of an online EMI calculator today to plan the repayment of your personal loan.


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