# Check EMI, Interest Rate and Tenure Using a Personal Loan Calculator

In April 2019, RBI cut the repo rate by 25 bps and this has significantly benefitted borrowers. Repo rate refers to the interest rate that RBI charges banks for borrowing money. So, when repo rate falls, banks, like ICICI Bank, transfer the saving to their customers. So, if you are planning to take a personal loan (or any other loan, for that matter) from ICICI Bank, now is a good time. However, before taking the loan, it is advisable to use the ICICI Bank personal loan EMI calculator help you check the total amount that you would need to pay should you decide to repay the loan in full before its full tenure is over. Personal loan preclosure calculator will help you see whether it more beneficial for you to preclose the loan early or continue paying the EMIs.

### ICICI Bank Personal Loan

When it comes to personal loans, you can expect ICICI Bank to offer a competitive interest rate. Personal interest rate begins from 11.25% and goes all the way to 22%. Many factors govern the interest rate. Some of these include your repayment capacity, CIBIL score, the loan amount and tenure. That is why it is essential you calculate the personal loan EMI so that you know the obligation you will have for the entire duration of the tenure. Then using the ICICI Bank personal loan preclosure calculator, you can gauge the options that you have a few months down the line when your financial situation gets better.

To give you a clearer picture of what kind of monthly installments you would have to pay if you take a personal loan from ICICI Bank, here is an example using different loan amounts at an interest rate of 11.25% for different tenures.

Loan Amount (Rs.)             2 Years              3 Years                              5 Years
1 Lakh                                       Rs4,672              Rs3,286                                 Rs2,187
3 Lakh                                       Rs14,017            Rs9,857                                 Rs6,560
5 Lakh                                       Rs23,362            Rs 16,429                              Rs 10,934
10 Lakh                                     Rs46,724            Rs32,857                              Rs 21,867

This example clearly shows that the longer the tenure, the lesser is the EMI. It is prudent to remember that with each payment you make, the amount of the principal keeps increasing while the interest component keeps decreasing. However, the longer the tenure of the personal loan, the higher the interest component.

Currently, ICICI Bank allows you to opt for a tenure ranging anywhere from 12 months (1 year) to 60 months (5 years). However, it is not necessary that the bank will approve a 5-year tenure on approving your personal loan application as the bank uses different parameters to decide the tenure of the loan and hence, the interest rate and EMI.

### Factors that Affect the EMI for an ICICI Bank Personal Loan

The factors that ICICI Bank uses to calculate the EMI are described below. Remember, these factors are common to all banks.

Loan Amount: It goes without saying that the higher the personal loan, the higher will be your monthly installments. ICICI Bank offers a minimum personal loan of Rs50,000 to a maximum of Rs30 Lakh.

Interest Rate: The higher the interest rate, the bigger your monthly burden and total cost of taking the personal loan. It is prudent to remember that ICICI Bank usually offers a lower interest rate for professionals with salary accounts. If you fall in this category, it will reduce the overall cost of taking the loan as well as the EMI. Presently, ICICI Bank’s lowest interest rate for personal loan stands at 11.25%.

Tenure of the Loan: The tenure of the personal loan also impacts the personal loan EMIs. Longer tenures have lower EMIs. The maximum tenure that ICICI Bank offers is 5 years for a personal loan.

Based on the aforementioned factors, ICICI Bank uses the following formula to calculate EMI:

P*r* (1+r)^n/([(1+r)^n]-1)

Where,

P = Loan amount, which can vary from Rs50,000 to Rs30 Lakh

r = Interest rate per month

n = Tenure of the loan, which can range from 12 months to 60 months

### How to Decide EMI Amount that is Right for You

ICICI Bank personal loan EMI calculator helps to decide the amount of personal loan you should take and the cost of taking and repaying the loan early. However, you should also keep an eye of the EMI, as it is the best way to ascertain your monthly burden.

### Here are a few tips to help you decide the right EMI amount for you:

Decide the Loan Amount: Before you apply to ICICI Bank for a personal loan, you should know approximately the loan amount that you should borrow. It is prudent to remember that personal loans are unsecured loans. Hence, they attract a higher rate of interest. So, it is always preferable to apply for the minimum loan amount. Ensure you also take the shortest tenure possible, so you don’t end up paying a lot on the interest.

Calculate Your Current Liabilities: Total your current financial obligations, including other loan payments, living expenses and other expenses you may have. Once you know your liabilities, you will immediately be able to calculate the EMIs you can pay without feeling the pinch. Once you know the EMI you are comfortable repaying, you can easily choose the right loan tenure.

Check the ICICI Bank Personal Loan Eligibility: Make sure you are eligible to apply for a personal loan. Usually, banks have standard eligibility criteria. You need to be a salaried professional between the ages of 23 and 58 with a high CIBIL score and you should have filed your income tax returns for the last 2 years.

In addition to the monthly EMI, you will also have to pay a processing fee, which ranges anywhere from 0.99% to 2.25% of the loan amount. The processing fee has to be paid at the time of applying for the loan. Once you get your ICICI Bank personal loan, you can use it for any purpose, including funding higher education, medical treatment, emergencies or repaying other loans.

### Anoop Bansal

Author Since: Jan 17, 2019

Anoop Bansal, a professional Chartered Accountant based in the National Capital - Delhi. I have worked for the top-notch Indian and International banking firms for the past 10 years. Currently, I work at emi-calculator.loan blog and a financial consultant for different SMEs in India. Follow me on Facebook, Twitter and Linkedin for more information.

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