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2 mins Read | 1 Year Ago

Always Check the Monthly EMI on a Personal Loan Before You Apply

Factors affecting your eligibility for a Personal Loan

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Always Check the Monthly EMI on a Personal Loan Before You Apply … Here’s Why :

Personal Loans are the product of choice for millions of Indians looking to supplement their finances to meet a variety of expenses be it for a much-needed vacation, a wedding to remember, overseas education for their children or other expenses. With ICICI Bank eligible borrowers can avail a Personal Loan of up to Rs 50 lakh. The wide-ranging amounts that can be availed serves borrowers of all financial standing and their dynamic requirements. While Personal Loans are a terrific financial tool, there are some good practices borrowers can abide by to get a deal that works for them in the long run.

While taking a Personal Loan you must focus on and factor in the loan amount and the interest rate. 

However, another very important thing you should always consider before applying for any type of loan is the monthly EMI. In this blog we have explained what monthly EMI is, why it is important to consider and how you can use a Personal Loan EMI calculator to calculate it without any scope for error. We will also discuss other considerations such as the processing fees for Personal Loans and other aspects you should know before taking a loan. 

What is monthly EMI? 

The monthly EMI is the money you will have to pay through instalments for your loan each month. This amount is calculated based on the interest rate, the loan amount and the loan tenure. Let’s say you are taking a loan of Rs 1,00,000 for a tenure of 3 years 36 months at an interest rate of 12% per annum. Your monthly EMI will be approximately Rs 3,321 Rs 1,000 towards interest and Rs 2,321 towards the principal amount). As the loan tenure progresses, the EMI amount will remain the same but the distribution of principal and interest will change. The principal portion will increase while the interest portion will reduce. For instance, your 36th and last EMI will be Rs 3,321 Rs 33 towards interest and Rs 3,289 towards the principal amount.

It is Important to Consider Monthly EMI: Here’s Why 

Knowing your monthly EMI is important for several reasons:

  1. It helps you plan your monthly budget: If you know how much you will have to pay each month towards your Personal Loan repayment you can plan your monthly budget accordingly. If the monthly takeaway seems high take a lower loan amount or extend your repayment tenure. If the monthly interest is as per your budget you can shorten the duration of your loan and repay it sooner. Use our Personal Loan EMI Calculator to check all these options and find an amount that will work for you. It will help you to avoid financial strains and stress in the near or distant future.

  2. It will let you better compare the loan offers: While looking for a Personal Loan you will come across many loan offers with different interest rates, loan amounts and tenures according to your eligibility and personal finances. If you know the monthly EMI on different loan offers you can easily compare them and choose the most affordable one. Again most banks have EMI Calculators like ours on their websites and you can use them for free.

  3. It prevents you from defaulting on your loan: If a borrower defaults on their loan repayment it will adversely affect their credit score and viability as a potential borrower for any bank or NBFC. If you are not clear on your monthly EMI you may underestimate your loan repayment amount and default. Defaulting on a loan can invite penalties and perhaps even legal action.

How to Calculate Monthly EMI? 

Using a Personal Loan EMI Calculator will make your loan application more convenient. Calculating your monthly EMI manually can be a tedious task. However, you can easily calculate it using a Personal Loan EMI calculator: a free online tool that helps you calculate your Equated Monthly Instalments (EMI) including the principal and interest amounts.

How to Calculate Your Monthly EMI:

Step 1: Go to ICICI Bank's Personal Loan EMI Calculator page

Step 2: Enter the loan amount, the interest rate and the loan tenure

Step 3: Click on the ‘Calculate’ button

Step 4: The calculator will display your monthly interest, EMI and total interest payable

Using a Personal Loan EMI calculator is a quick, easy and correct way to calculate the monthly EMI, compare the loan offers and choose the one that is most suited for you.

Processing Fee for Personal Loans

In addition to monthly EMI, one must also take a note of any processing fee on your Personal Loan. It is a fee charged by the lenders for processing your loan application. It is usually a percentage of the loan amount and can range anywhere from 1% to 5% of the loan amount.

The processing fee can have a sizeable impact on the overall cost of any loan you take. For example, if you take a Personal Loan of Rs 1,00,000 with a processing fee of 2% you will have to pay a processing fee of Rs 2,000. Your loan amount will be Rs 98,000 and your EMI and monthly EMI interest will be calculated based on this amount.

It is advisable to factor in the processing fee while comparing the loan offers from different lenders. A loan with a lower interest rate but a higher processing fee may become more expensive than a loan with a higher interest rate at a lower processing fee.

Other additional charges you should also be aware of:

  • Prepayment charges

  • Additional interest on late payments

  • EMI bounce charges


When applying for a Personal Loan it is important to consider the loan amount, interest rate and processing fee. This will help you to plan your monthly budget, compare loan offers and avoid defaulting on your loan. Using a Personal Loan EMI Calculator is the fastest and the most convenient way to calculate your monthly EMI. Additionally, factoring in any processing fee will let you determine the exact outlay of your loan repayment and help you to make the best financial decisions. 

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