A personal loan is beneficial on many counts: it may help pay for unplanned expenses like weddings, medical emergencies, starting up a business, or other necessities. However, before you apply for such a loan, you must figure out an EMI amount that would be payable for you. You may use a personal loan EMI calculator to figure out the exact amount, but here are a few guidelines to go by:

Your monthly salary

Before applying for an instant personal loan online, you should factor in your monthly salary. To manage your other expenses, your EMI should be your salary minus your monthly expenses. An industry thumb rule is that EMI should never exceed half of your salary for the month.  

Monthly expenses 

You cannot cut back on your necessary monthly expenses such as food, water, electricity, rent, clothing, toiletries, etc. You must have a general estimate of this amount as well as some sort of leeway in case your calculations have gone wrong. 

Any pending loans 

Another thing to consider before finalizing your personal loan EMI amount is your already pending loans. If you have another loan of any sort – either another personal loan, home loan or a loan against property – the EMI for all these loans should not exceed half of your monthly salary, as mentioned above. 

Payback capability of the object 

It is advisable to not take personal loans for anything that doesn’t guarantee a certain amount of payback. This payback can be personal or financial. For example, taking a personal loan for a  business gives some sort of payback. 

Number of working years left 

Your EMI should have ended before your retirement. Even otherwise, you must have enough money in savings to sustain yourself through your non-working years. 

Try to keep in mind the aforementioned points while applying for a personal loan online. It will no doubt help you in the long run. 

Additional Read: Does Credit Score Affect Your Personal Loan Application?