Check Out 10 Lakh Personal Loan EMI for 5 Years & 10 Years

A Personal Loan is a type of loan that a customer can avail to meet their ad-hoc requirements. The loan typically can be taken in scenarios of – buying some product, weddings, purchasing furnishings, medical expenses, etc.

As the loan is unsecured in nature, there is no collateral requirement for it. Personal Loan is disbursed by registered financial institutions as a lump sum in the account of the customer. This is done after the customer meets the basic loan eligibility criteria and assessment of risk as defined by the lender.

In terms of supporting documentation to show that the eligibility criteria are getting met, customers are required to produce some KYC documents when applying for a Personal Loan of 10 Lakh or any amount. The list of documents could include their address proof, identity proof, proof of working and a document of income.

Usually, lending institutions check the credit score and credit history of the customer for any discrepancies and make an offer of a Personal Loan with a fixed interest rate and a defined tenure.

A Personal Loan is generally available in different loan amounts with different tenures, for example, you can avail of a 10 Lakh Personal Loan for 5 years or a 10 Lakh Personal Loan for 10 years. But whenever you are planning to take the same you should check the repayment schedule of the loan by checking 10 Lakh Personal Loan EMI for 5 years or 10 years as per your repaying capacity. And to calculate how much EMI you have to pay for a 10 Lakh loan, you need to use digital Personal Loan Calculator available on the internet. This will help you to apply for the best Personal Loan in India with proper planning.

Also Read: What Is FOIR And How Is it Calculated On A Personal Loan?

For a customer with no credit history, there are different risk policies that lending institutions follow to generate a loan offer.

What Is EMI? Meaning & Definition

The repayment of the money borrowed is done in easy equal monthly installments, also termed as EMIs. This is the amount that customer pays to the financial institution for taking the loan.

EMIs are worked out with the three variables:

• Principal Amount is the amount borrowed by a customer from the lending institution.
• Tenure is the duration for which the loan amount is borrowed.
• Rate of interest is the interest that lending institutions charge from the customer.

For any loan amount, there is an amortization schedule that lending institutions create, which shows the relationship between EMI payable, interest rates, tenure, interest payable, and principal payable.

What is a 10 Lakh Personal Loan EMI?

To explain a few scenarios on Personal Loans, let us take a few examples-

10 Lakh Personal Loan EMI for various tenures at the interest rate of 15%

The manual calculation of EMI for a 10 Lakh Personal Loan will be as follows:

• Assume the following:

Principle:  Rs 10 Lakh

Rate of interest: 15% i.e., 0.0125 per month

N (Period): 2 years i.e., 24 months

• The formula to calculate the EMI will be: [P*R*(1+R)^N ]  / [(1+R)^(N-1))]
      [1000000*0.0125*(1+0.0125)^24 ]  / [(1+0.0125)^(24-1))] = Rs 48,487
• Therefore, the EMI applicable for this loan is Rs. 48,487

Also Read: 6 Easy Ways To Fast Pay Off Your Personal Loan

Personal Loan EMI Formula in Excel

The EMI can also be calculated in Microsoft Excel by using a simple formula:

Use the PMT (Rate, NPER, PV, FV, TYPE) formula by selecting any cell

• Rate: The Rate of Interest on the loan
• NPER: Total number of installments
• PV: Principal amount of the loan
• FV: Will be 0 for EMI calculation
• Type: If EMI is paid at the beginning of the month, use 0. Otherwise, use 1.

 

EMI Calculation for the loan of 10 Lakhs
Attribute	1st	2nd	3rd	4th	5th
Principal (Rs.)	10,00,000	10,00,000	10,00,000	10,00,000	10,00,000
Rate per annum	15%	15%	15%	15%	15%
Tenure (Months)	12	24	36	48	60
EMI	Rs.90,258	Rs.48,487	Rs.34,665	Rs.27,831	Rs.23,790

 

From the illustrated table it is apparent that the longer the tenure, the lesser will be the EMI; however, the amount paid will be higher in the form of interest.

It is advisable that the customer should keep the tenure as optimal as possible for a well-balanced Personal Loan. Also, the customer should pay their EMIs on time for avoiding any undue penalties and subsequently an impact on their credit score.

As a Personal Loan is an unsecured loan, it does not require any form of collateral or guarantee, hence it is comparatively at a higher interest rate than other secured loans.