Home Investment Planning What is EMI calculator? How to get loan in 5 minutes?

What is EMI calculator? How to get loan in 5 minutes?

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The size and scope of financial services industry is taking new highs day by day. It has become easy to start a business or meeting personal requirements with numerous options of loans and advances. One can avail of a loan without any collateral or security for a pre-decided period of time at a particular rate of interest. However, to minimise the risk of lenders, the borrower will need to provide proof of employment and income along with sufficient identity proof. So, let’s go through various aspects of loan and more about EMI calculator in this article.

Our minimal paperwork, affordable interest rates and flexi EMI calculation structure make it a hassle-free way to fund your dreams and responsibilities.

What are the factors to consider for Loan Eligibility:

Though the overall loan process is simplified, it’s not that easy to get a loan from bank. There are few factors that is being considered before your loan approval.

Job security:

A bank will look into what you do, where you work, and how long you’ve been in your current employment. In case, if you are in your current job less than a year, then the bank may ask some further questions/document from you to ascertain whether or not your job can be considered secure. Those who are into self-employment/business will need to provide a longer track record of stable income.


It is the amount of money you earn every month will play a part in whether or not the bank has confidence on you meeting your monthly loan repayments. It does not mean only salary; Income is everything you earn on a regular basis through different sources.

Savings history:

The focus on savings history has grown in recent years as banks really look into the ‘eligibility’ of the borrower. Banks are very cautious before approving your loan application. They would request your transactions history, bank statements etc. to ensure that their money is safe.

Credit rating:

Check your credit rating, it shows the lesser score, which means your loan application, would be automatically rejected. So, it is very difficult to get loan with bad credit.

Filing of Income tax returns:

Some of us might feel that our total income is less the minimum taxable amount and hence, don’t file a return of Income Tax. However, it is always important to keep in mind that filing return is not only required for tax payment, but also it shows your credibility in declaring your income. Banks rely upon either Form no.16 or acknowledgement received on filing the return.

How to get loan? What are the documents required for loan?

Step 1: Determine your requirement

Figure out why you need a Personal Loan or any other loan. For example, you may need a loan to fund your wedding or to renovate your home. And you may need just Rs. 1 lakh or Rs. 10 lakh.

Step 2: Check loan eligibility
Once you know how much you need, you should check whether you are eligible. Check now with loan eligibility calculator online, to find out how much you can borrow as Personal Loan. For example, HDFC Bank offers loans up to Rs. 40 lakh.

Step 3: Calculate monthly instalments 
Use an online EMI tool to calculate your approximate loan repayments every month. You can modify the interest rate and tenure to match your monthly income in the EMI calculator. Check the EMI payable for personal loan, car loan or home loan in EMI calculation tool

Step 4: Approach the bank
You can apply for a loan online through your net banking account. You can either apply for loan online or visit the nearest branch to proceed further. 

List of documents for Salaried:

  • Proof of Identity:- Passport / Driving License / Voters ID / PAN Card (any one)
  • Proof of Residence:- Leave and License Agreement / Utility Bill (not more than 3 months old) / Passport (any one).
  • Latest 3 months Bank Statement (where salary/income is credited).
  • Salary slips for last 3 months.
  • 2 Passport Size photographs.

Also Read: Simple tips to decide whether you need a personal loan or not!

List of documents for Self-Employed:

  • KYC Documents : Proof of Identity; Address proof; DOB proof.
  • Proof of Residence:- Leave and License Agreement / Utility Bill (not more than 3 months old) / Passport (any one).
  • Income proof (audited financials for the last two years).
  • Latest 6 months Bank statement.
  • Office address proof.
  • Proof of residence or office ownership.
  • Proof of continuity of business.

Loan EMI Calculator – How Does EMI Calculator work?

This is one question that has puzzled many of us. The answer lies in understanding how loan calculations work. Most loans are Reducing Balance loans (instead of flat interest rate loans).

How Reducing Balance Method Works?

Under the reducing balance method, a portion of your EMI goes towards interest payment while the remaining portion goes towards principal repayment. The EMI calculator is also works in the same way.

  • Monthly Interest Rate = Annual Loan Interest Rate ÷ 12
  • Interest Component of the EMI = Monthly Interest Rate × Principal Outstanding at the Beginning of the Month
  • Principal Component of the EMI = EMI – Interest Component of the EMI
  • Principal Outstanding at the End of the Month (i.e., Beginning of the next Month) = Principal Outstanding at the Beginning of the Month –Principal Component of the EMI

Let’s try to understand with the help of an example. Suppose you have taken a loan of Rs 50 lacs for 20 years. Let’s further assume that the rate of interest stays constant at 10% p.a. EMI for the loan is Rs 48,251You can easily find the EMI amount using  online EMI Calculator

When should you apply for Personal Loan and when not?



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