EMI Calculator

In this dynamic world, financial planning is too difficult. Equated Monthly Installments (EMIs) are an important part of financial planning. So the EMI calculator is your first step towards financial planning.

Whether you are considering any kind of loan, such as a bike loan, personal loan, education loan, or home loan, this is your first step towards informed decision-making on the EMIs of that loan.

What is EMI?

Equated Monthly Installment, or EMI for short, is the amount payable every month to the bank or any other financial institution until the loan amount is fully paid off. It consists of the interest on the loan as well as part of the principal amount to be repaid.

The sum of principal amount and interest is divided by the tenure, i.e., the number of months in which the loan has to be repaid. This amount has to be paid monthly. The interest component of the EMI would be larger during the initial months and gradually decrease with each payment.

The exact percentage allocated towards the payment of the principal depends on the interest rate. Even though your monthly EMI payment won’t change, the proportion of principal and interest components will change with time. With each successive payment, you’ll pay more towards the principal and less in interest.

How to Use an EMI Calculator?

With colourful charts and instant results, our EMI Calculator is easy to use, intuitive to understand, and quick to perform. You can calculate EMI for home loans, car loans, personal loans, education loans, or any other fully amortized loan using this calculator.

Enter the following information in the EMI Calculator:

• The principal loan amount you wish to avail (rupees)
• Loan term (months or years)
• Rate of interest (percentage)

Use the slider to adjust the values in the EMI calculator form. If you need to enter more precise values, you can type the values directly in the relevant boxes provided above. As soon as the values are changed using the slider (or by hitting the ‘tab’ key after entering the values directly in the input fields), the EMI calculator will recalculate your monthly payment (EMI) amount.

A pie chart of total principal vs. total amount payable is also displayed. Through this chart, you can know how much extra pay is in your loan tenure. The red colour shows the total amount you will pay in your loan tenure, and the blue colour shows the total amount you borrowed from financial institutions such as banks, NBFCs, third-party financial institutions, and so on.

Total Amount = Principal Amount + Total Interest Amount

Floating Rate EMI Calculation

We suggest that you calculate floating / variable rate EMI by taking into consideration two opposite scenarios, i.e., optimistic (deflationary) and pessimistic (inflationary) scenarios. The loan amount and loan tenure—two components required to calculate the EMI are under your control; i.e., you are going to decide how much loan you have to borrow and how long your loan tenure should be. However, the interest rate is decided by the banks & HFCs based on rates and policies set by RBI. As a borrower, you should consider the two extreme possibilities of increase and decrease in the rate of interest and calculate your EMI under these two conditions. Such calculation will help you decide how much EMI is affordable, how long your loan tenure should be, and how much you should borrow.

Optimistic (deflationary) scenario: Assume that the rate of interest comes down by 1%–3% from the present rate. Consider this situation and calculate your EMI. In this situation, your EMI will come down, or you may opt to shorten the loan tenure. If you avail home loan to purchase a house as an investment, then an optimistic scenario enables you to compare this with other investment opportunities.

Factors Affecting Your Due Amount

There are certain factors you need to consider while planning to apply for a loan. Based on your financial and repayment capacity, you will be required to calculate equated monthly installments (EMI). Here are a few factors to consider:

1. Term of the Loan

A loan’s tenure may be reduced or extended. Subsequently, there will be an increase or a decrease in the EMI amount as well. Thus, considering the term of a loan is also an important factor that may affect your due amount.

2. Rate of interest

The rate of interest is a vital factor that will help to assess the installment amount owed. You can compare the products and opt for one that has a lower rate of interest so that your overall repayment stays low.

3. Amount of the loan

Choosing the loan amount is another significant factor in determining your EMI. Based on the loan amount you choose, your equated monthly installment will be calculated accordingly.

How can an online EMI calculator help you?

Regardless of the type of loan you want to avail of, be it a secured or unsecured advance, it is paramount that you know how much monthly installment you have to make before you avail it. That is where an EMI calculator in India can be immensely helpful.

It helps you get an accurate estimate of your EMI amount so that you can plan your finances accordingly. Make sure that your debt-to-income ratio is below 50% to maximise your chances of loan approval.

A loan EMI calculator helps you save valuable time. You don’t have to do complex calculations manually, which can be quite time-consuming.

It eliminates any chance of a miscalculation, giving you an accurate estimate every time.

It is highly specific for each type of loan. The EMI breakup of a home loan, for example, is different from that of a personal loan.

The formula to determine loan EMI amount

There is a specific formula that is used to compute the EMI amount for a loan.

EMI = [P x r x (1+r) ⁿ]/ [(1+r) ⁿ-1]

where –

• P is the principal amount
• r is the rate of interest
• n is the loan tenure (in months)

This is the standardized formula used by any online loan calculator. Some variables may be added based on the type of loan.

For example, if you borrow ₹10,00,000 from the bank at 10.5% annual interest for 10 years (i.e., 120 months), then

EMI = ₹10,00,000 * 0.00875 * (1 + 0.00875)¹²⁰ / ((1 + 0.00875)¹²⁰ – 1)

= ₹13,493

i.e., you will have to pay ₹13,493 for 120 months to repay the entire loan amount.

The total amount payable will be ₹13,493 * 120 = ₹16,19,220, which includes ₹6,19,220 as interest towards the loan.

Types Of EMI Calculator

There are Main types of Loan and it’s EMI. There are a few EMI calculators mentioned below:

• Home Loan EMI Calculator
• Car Loan EMI Calculator
• Personal Loan EMI Calculator
• Education Loan EMI Calculator
• Loan against Property EMI Calculator