What is EMI?
EMI (Equated Monthly Installment) is the fixed amount you pay every month to repay your loan. It includes:
- Principal: The actual loan amount you borrowed.
- Interest: The extra amount you pay to the bank for lending you the money.
Formula for EMI: EMI=P×R×(1+R)N(1+R)N−1EMI = \frac{P \times R \times (1+R)^N}{(1+R)^N – 1}EMI=(1+R)N−1P×R×(1+R)N
Where:
- P = Loan amount (₹11,00,000)
- R = Monthly interest rate (Annual Rate ÷ 12)
- N = Total months (7 years = 84 months)
Example: EMI on ₹11 Lakh Loan for 7 Years
Let’s assume the interest rate is 11% per annum.
- Loan Amount (P) = ₹11,00,000
- Tenure (N) = 7 years = 84 months
- Interest Rate (R) = 11% ÷ 12 = 0.00916
Monthly EMI ≈ ₹18,780
So, for 7 years, your total repayment = ₹18,780 × 84 = ₹15,77,520.
That means, you pay ₹4,77,520 as interest in 7 years.
EMI Comparison at Different Interest Rates
| Loan Amount | Tenure | Interest Rate | Monthly EMI | Total Payable |
|---|---|---|---|---|
| ₹11,00,000 | 7 years | 10% | ₹17,990 | ₹15,11,160 |
| ₹11,00,000 | 7 years | 11% | ₹18,780 | ₹15,77,520 |
| ₹11,00,000 | 7 years | 12% | ₹19,590 | ₹16,46,160 |
| ₹11,00,000 | 7 years | 14% | ₹21,240 | ₹17,84,160 |
Higher the interest rate, higher the EMI and total repayment.
Factors Affecting EMI
- Interest Rate – Lower interest means smaller EMI.
- Loan Tenure – Longer tenure reduces EMI but increases total interest.
- Credit Score – Higher credit score = better interest rates.
- Prepayment – Paying part of the loan early reduces EMI burden.
Tips to Reduce Your EMI
- Compare lenders before applying.
- Maintain a strong credit score (750+).
- Negotiate for lower interest rates.
- Opt for part-prepayment when you have extra funds.
Final Thoughts
If you take a ₹11 lakh loan for 7 years, your EMI will be around ₹18,000–₹19,500, depending on the interest rate.
Before applying, always use a personal loan EMI calculator to plan your finances and avoid surprises.
FAQs
1. What will be EMI for ₹11 lakh loan for 7 years at 12% interest?
Around ₹19,590 per month.
2. Can I reduce my EMI after taking the loan?
Yes, through prepayment, balance transfer, or loan restructuring.
3. Is 7 years a good tenure for a personal loan?
It reduces EMI but increases total interest paid. Choose based on your repayment capacity.
Disclaimer: This article is for general information only. The interest rates and terms mentioned in it depend on the policies of the bank and NBFC. These may change from time to time. Before taking any type of loan, get complete information from your bank.