How to calculate your personal loan EMI using Excel

Among the particulars of a personal loan, the monthly instalments or EMIs are those you should pay maximum attention to. They dictate your interest outgo throughout the tenor and the overall cost of your loan. This is why it's essential to know how to calculate your EMIs well before you borrow, as it helps you plan your repayment effectively. To calculate as accurately as you can, its a good idea to check your eligibility for a personal loan and see how much you can borrow,

✅ Check your pre-approved loan offer with phone number and OTP → Know the exact loan terms and your EMI → Apply online and receive funds within a day*.

Since EMI calculation involves mathematical precision, you can use the EMI formula in Excel to output results manually. However, this process requires you to calculate values for several variables and demands a certain level of proficiency with spreadsheet functions.

Excel provides the PMT function rather than a specific EMI function. PMT stands for "payment" and calculates the total loan payment required to close a loan based on the interest rate and tenure. The PMT function is specifically designed for financial calculations and provides accurate results when used correctly.
 

Formula = PMT(RATE, NPER, PV, FV, TYPE)

Besides PMT, all other elements in this formula are variables that need assigned values. These correspond to your loan particulars and must be entered carefully to get an accurate result. Here's a detailed breakdown of these critical variables:

1. RATE - Interest Rate Calculation

The interest rate applicable on loans. The value for this variable must be converted by dividing the annual rate by 12 to get the monthly rate.

Example: For 12% annual interest: 12%/12 = 1% or 0.01 in decimal form

Important: Always ensure you're using the monthly rate, not the annual rate, for accurate EMI calculations.
 

Additional Read: CIBIL score calculation - Understanding how your credit score affects the interest rate you qualify for can help you negotiate better loan terms.
 

2. NPER - Number of Payment Periods

This variable denotes the total number of EMIs applicable for the tenor. Calculate this by multiplying the number of years by 12.

Example: For a 5-year loan, NPER = 5 × 12 = 60 monthly payments
 

3. PV - Present Value (Principal Amount)

This variable represents the principal loan amount or present value. Enter the exact amount you intend to borrow.

Note: In Excel's PMT function, the principal amount should be entered as a positive value, but the result will show as negative (representing outgoing payments).
 

4. FV - Future Value

This variable denotes the future value or balance remainder after the last payment. For most personal loans, this value is 0 since you'll pay off the entire loan. You may omit this parameter, and it won't affect the results.
 

Additional Read: What is compound interest & simple interest: How to calculate it - Understanding these concepts helps you appreciate how EMIs are structured and why early payments have greater impact.
 

5. TYPE - Payment Timing

This variable denotes when the payment is due, with values of 0 or 1:

• TYPE = 0: Payment due at the end of the period (most common for personal loans)
• TYPE = 1: Payment due at the beginning of the period
   

Practical example: EMI calculation in Excel

Loan Details:

• Principal Amount: Rs. 5,00,000
• Interest Rate: 14.60% per annum
• Tenure: 48 months
   

Excel Formula:

=PMT(0.01216666, 48, 500000, 0, 0)
 

Calculation Breakdown:

• RATE: 14.60%/12 = 0.01216666
• NPER: 48 months
• PV: 500000 (principal amount)
• FV: 0 (loan fully paid off)
• TYPE: 0 (payment at month end)
   

Result: -13,814 (The negative sign indicates an outgoing payment)
 

Monthly EMI: Rs. 13,814
 

Additional Read: Improve your CIBIL score - A better credit score can help you secure lower interest rates, which directly reduces your EMI amount.
 

Limitations of Excel EMI calculations

Important consideration: Using the EMI calculator in Excel leaves room for human error and miscalculations. These errors can negatively affect your ability to make sound financial decisions and possibly lead you to either overestimate or underestimate your repayment capacity.

Common issues with manual Excel calculations include:

• Formula errors: Incorrect input of variables or formula syntax
• Rounding mistakes: Improper handling of decimal places in interest rate conversions
• Variable confusion: Mixing up annual and monthly rates or payment periods
• Time consumption: Manual calculations take significantly longer than automated tools
   

Better alternative: Online EMI calculators

To avoid calculation risks and ensure accuracy, consider using an online personal loan EMI calculator instead. This handy, free-to-use tool automatically computes your interest outgo, total debt, and monthly instalments without the need for any manual calculations.
 

Benefits of online EMI calculators:

• Zero calculation errors: Automated computations eliminate human error
• Instant results: Get immediate EMI calculations without spreadsheet setup
• Multiple scenarios: Easily compare different loan amounts, rates, and tenures
• Additional insights: Many calculators show total interest payable and amortisation schedules
• Mobile-friendly: Access calculations anywhere, anytime
   

Additional Read: What is Annual Percentage Rate (APR): Understanding how APR is calculated - APR gives you a complete picture of loan cost including fees, helping you make better comparisons.

Now that you’re aware of a sure-fire way to access this key piece of information, take a look at a few important reasons why you should know your EMIs beforehand.

• Allows you to plan your repayment in advance
• Aids in identifying a loan amount that suits your capabilities
• Help compare loan offerings
• Lets you decide on a suitable tenure
   

Bajaj Finserv Personal Loan advantages

One way to ensure your loan terms are pocket-friendly is to choose a competitive loan such as the Bajaj Finserv Personal Loan. Here's why it stands out:
 

• Competitive rates: Access to nominal personal loan interest rates on collateral-free loans
• High loan amounts: Sanction up to Rs. 55 lakh based on your eligibility
• Flexible repayment: Choose tenure from 12 months to 96 months
• Instant approval: Quick decision-making process
• Fast disbursal: Entire sanction disbursed within 24 hours*
• Emergency-ready: Ideal for urgent financial needs
• Easy qualification: Straightforward eligibility criteria
• Complete transparency: No hidden charges or surprise fees
   

These features make the Bajaj Finserv Personal Loan an excellent choice for borrowers seeking reliability, transparency, and value.