North India Statesman
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Sometimes in life, we all suddenly need money. Sometimes for children’s education, sometimes for a wedding at home, and sometimes for some medical emergency. In such times, taking a personal loan from a bank seems to be a common and easy way. Getting a loan from a big bank like HDFC Bank has now become easier than before.
But in the joy of taking a loan, the most important question that we often forget is – “How much money will go out of my pocket every month?”
If you have decided to take a loan of Rs 5 lakh, then it is very important to know what your EMI (monthly installment) will be if you repay it in 3 years, 4 years or 5 years. Come, let us understand this entire mathematics in very simple language.
What is this EMI after all?
EMI means ‘Easy Monthly Installment’. This includes both a small part of your loan and the interest charged on it. The bank gives you Rs 5 lakh at once and you repay it little by little every month. This is EMI. It is important to understand this so that your household budget does not get spoiled.
EMI plan for 3, 4 and 5 years on loan of Rs 5 lakh
The EMI calculation depends on three things – the loan amount (₹5 lakh), the interest rate (this varies, we are assuming 12% for example here), and the loan repayment tenure.
Plan 1: When early loan repayment (3 years / 36 months)
If you want to get rid of the loan burden quickly, then the 3 year option is the best.
- Benefit: The loan ends quickly and you pay less interest overall.
- Loss: Every monthly installment is a little higher, which can make the monthly budget tight.
- Estimated EMI: About ₹16,600 Per month.
Plan 2: When to take the middle path (4 years / 48 months)
This is for those people who neither want to pay too high EMI nor want to stretch the loan for too long.
- Benefit: EMI burden reduces slightly, thereby saving more money for monthly expenses.
- Loss: A little more interest has to be paid than the 3 year plan.
- Estimated EMI: About ₹13,200 Per month.
Plan 3: When you have to pay less every month (5 years / 60 months)
If your monthly income is limited or you have other expenses, then this plan puts the least burden on your pocket.
- Benefit: EMI reduces significantly, due to which you can easily pay the installments.
- Loss: The loan lasts the longest, so you pay the highest interest overall.
- Estimated EMI: About ₹10,900 Per month.
See complete account at a glance
| loan repayment time | EMI per month (approx.) | Total amount out of pocket (approx.) |
| 3 year (36 months) | ₹16,600 | ₹5.98 lakh (Interest: ₹98,000) |
| 4 years (48 months) | ₹13,200 | ₹6.33 Lakh (Interest: ₹1.33 Lakh) |
| 5 years (60 months) | ₹10,900 | ₹6.55 Lakh (Interest: ₹1.55 Lakh) |
(This calculation is based on the assumption of 12% annual interest rate. EMI may change slightly as per the bank rate.)
Which plan is right for you?
- 3 year plan: If you have a good salary and hate debt, choose this.
- 4 year plan: If you want a balance between EMIs and savings, this is for you.
- 5 year plan: If you have more responsibilities and want to manage your monthly expenses comfortably, then choose this.
the most important thing
Before taking a loan, think about whether you will be able to pay the EMI on time every month? Missing even one installment leads to a penalty and your CIBIL score gets affected, making it difficult to get a loan in future. Always spread the sheet as long as your legs are.
