In this work, the effect of external loading on the martensitic transformation is analyzed using an elasto-plastic phase field model. The phase field microelasticity theory, incorporating a non-linear strain tensor and the effect of grain boundaries, is used to study the impact of applied stresses on an Fe-0.3%C polycrystalline alloy, both in two and three dimensions. The evolution of plasticity is computed using a time-dependent equation that solves for the minimization of the shear strain energy. Crystallographic orientation of the grains in the polycrystal is chosen randomly and it is verified that the said assumption does not have a significant effect on the final volume fraction of martensite. Two-dimensional (2-D) and three-dimensional (3-D) simulations are performed at a temperature significantly higher than the martensitic start temperature of the alloy with uniaxial tensile, compressive and shear loading, along with hydrostatic stresses. It is found that the 3-D simulations are necessary to investigate the effect of external loading on the martensitic transformation using the phase field method since the 2-D numerical simulations produce results that are physically incorrect, while the results obtained from the 3-D simulations are in good agreement with the empirical observations found in the literature. Finally, it is concluded that the given model can be used to predict the volume fraction of martensite in a material with any kind of external loading.