Understanding EMI for a ₹25 Lakh Personal Loan
EMI (Equated Monthly Installment) is the fixed monthly payment you make to repay your loan. It consists of two parts:
- Principal – the original amount you borrow (₹25 lakh).
- Interest – the cost of borrowing from the bank or lender.
The EMI amount depends on:
- Loan amount (₹25,00,000)
- Tenure (4 years or 48 months)
- Interest rate (usually 10%–16% for personal loans in India)
EMI Calculation for a ₹25 Lakh Loan (4 Years)
Let’s calculate EMI with an example.
- Loan Amount: ₹25,00,000
- Tenure: 4 years (48 months)
- Interest Rate Range: 10% – 16%
Approximate EMI (per month):
- At 10% interest → around ₹63,400/month
- At 12% interest → around ₹66,000/month
- At 14% interest → around ₹68,700/month
- At 16% interest → around ₹71,400/month
So, your monthly EMI for a ₹25 lakh personal loan for 4 years will be between ₹63,000 and ₹71,500, depending on the interest rate offered by your lender.
Total Repayment Over 4 Years
Here’s how much you’ll end up paying in total:
- At 10% → approx. ₹30.43 lakh
- At 12% → approx. ₹31.70 lakh
- At 14% → approx. ₹33.05 lakh
- At 16% → approx. ₹34.33 lakh
This means you’ll pay an extra ₹5–9 lakh as interest over 4 years.
Factors Affecting Your EMI
- Credit Score (CIBIL): Higher score = lower interest.
- Lender Policies: Different banks/NBFCs offer different rates.
- Loan Tenure: Shorter tenure = higher EMI but less interest overall.
- Income & Employment Stability: Higher income and stable jobs help secure better terms.
- Prepayment Options: Paying early reduces interest burden.
Smart Tips to Manage a ₹25 Lakh Loan
- Use a Loan EMI Calculator: Always check EMI before applying.
- Compare Lenders: Never settle for the first offer—compare banks and NBFCs.
- Opt for Auto-Debit: Avoid missed payments by linking your account.
- Prepay When Possible: Even small prepayments save big on interest.
- Maintain a High Credit Score: Aim for 750+ to get the lowest rates.
FAQs
Q1. What is the minimum salary required for a ₹25 lakh personal loan?
It depends on the lender, but generally, a monthly income of ₹80,000–₹1,00,000 is required to qualify.
Q2. Can I reduce my EMI after taking the loan?
Yes, by either increasing tenure or part-prepaying the loan amount.
Q3. Is it better to choose a longer tenure?
A longer tenure reduces EMI but increases total interest. Shorter tenure is cost-effective if you can afford higher EMIs.
Q4. What happens if I miss an EMI?
You’ll face late payment penalties and it may impact your credit score.
Q5. Should I take a fixed or floating rate loan?
Fixed rates provide stability in EMIs, while floating rates may reduce if interest rates go down.
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.