EMI or Loan calculator

EMI Amount XXXX/month
Total Payable
With Interest		 XXXX
Total Interest XXXX

Loan Amount:  

Interest Rate:

 % Per Year

Loan Tenure:





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What is an EMI?

A loan is a financial agreement between two parties, a lender and a borrower. Under this agreement, the lender gives a specific amount of money to the borrower with the intent that the amount borrowed is paid back with interest as monthly installments over a predetermined period of time by the borrower. Using an EMI calculator is the easiest way to determine your monthly payouts and balance your budget accordingly. Everyone has to borrow a loan at some point in time in their life whether for buying a car or a house, funding their child’s education or consolidating debts, etc. Thus, loans have become an important part of everyone's life in today’s times. Loans can be availed for various purposes, but the key components on loans are always the same, namely - loan amount, loan tenure and interest rates.


What is a Loan EMI Calculator?

EMI is the payment which the borrower makes every month towards loan repayment of the loan. EMI constitutes the principal amount along with the accrued interest. You can use the EMI calculator to calculate your monthly loan EMI payouts. The borrower just needs to enter the variables of the loan such as the principal amount, tenure and interest rate and it instantly fetches an result which is the EMI. Calculating EMI using the online EMI calculator is easy and you get to know your loan EMI in seconds. Paisabazaar’s online loan EMI calculators are available 24*7 without any cost! So calculate or compare various loan EMIs any number of times you wish to, for free.
 

Whenever we talk about loans, one of the first thing that crosses the mind is EMI. The abbreviation, EMI stands for Equated Monthly Installment. An equated monthly installment (EMI) is the amount that a loan borrower pays every month in order to repay the money borrowed. There is a particular date each calendar month by which the EMI should be paid by the borrower. The loan amount plus the accrued interest is divided equally over a period which is the loan tenure and you can easily calculate this final amount using an EMI calculator. The number of equated monthly installments is equal to the number of months in the loan repayment tenure.
 

EMIs are beneficial as you can pay the borrowed amount back in parts and reduces the financial pressure on the borrower. The EMI style is preferable as it is not easy for everyone to pay back a lump sum amount of money all at once especially in case of large amount such as home loans. Therefore, EMIs are an added advantage as you can pay little over the loan tenure and repay the amount borrowed in full. EMIs gives a broader section of society the option to realize their dreams of affording expensive things, such as a house, car, etc., that they won’t be able to buy if they needed to make payments all at once. Using an EMI calculator, you can easily figure out your loan repayment requirement and plan your monthly budget accordingly. You have the flexibility to decide the amount that you are comfortable to pay off monthly and the duration for which you wish to make the payments depending upon your income and financial stability.
 

EMI payments contribute towards the loan amount and accrued interest on the loan amount. The initial EMI payments contribute more towards the interest component of the loan and this procedure is termed as front loading. In the later stages of the loan tenure, the major contribution of the EMI goes towards repayment of the loan principal.

Commonly, EMIs are fixed and the borrower has to pay fixed monthly installments to satisfy the loan amount. But, the loan EMIs can vary in the case of floating interest rate loans and prepayments. The amount of your monthly EMI depends on certain factors pertaining to your loan. You can calculate the EMI applicable to your loan using the formula for calculating EMI. Calculating EMIs using the formula is not an easy task and involves complicated calculations. Rather, opting for an EMI calculator is a better choice as it determines EMIs within seconds of your input.
 

How are Loan EMIs Calculated?

Loan amount, tenure and interest rate are the three key parameters of a loan and these vary in case of different loan providers. EMI applicable to a loan varies according to all these three parameters. Therefore, before choosing a particular loan, it is very important to have an understanding of these three parameters and how do they relate to the loan EMI. An EMI, or equated monthly installment, is the amount that is payable by you every month to the lender in order to satisfy the principal and the accumulated interest. You can calculate EMI for loans in the following three ways:
 

Calculate Your EMI Using Mathematical Formula

EMI = [P x R x (1+R)^N]/[(1+R)^ (N-1)],

In this formula the variables stand for:

EMI is the equated monthly installment
P is the principal or the amount that is borrowed as a loan
R is the rate of interest that is levied on the loan amount (the interest rate should be a monthly rate)
N is the tenure of repayment of the loan or the number of monthly installments that you will pay (tenure should be in months)

This is the same formula an EMI calculator uses to provide you with the correct EMI payable within seconds.

 

Let us consider an example to understand EMI calculations in a better way,

For instance, you have taken a personal loan of Rs. 2 lakhs for 2 years at an interest of 20 % p.a.

Firstly, we need to convert the annual interest rate into a monthly rate and the tenure into months.

To calculate the monthly interest rate, we divide the annual interest rate by the number of months in a year, i.e. 12, so monthly 20/12 = 1.66% per month

The 2-year loan tenure must also be converted into months before integrating into the formula i.e. 24 months

 

Now we have the three variables with us which we can integrate into the formula as follows:

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

EMI= [2,00,000 x 1.66/100 x (1+1.66/100) ^ 24 / [(1+1.66/100) ^ 24 - 1)

EMI= Rs. 10, 179

 

The EMI calculator formula is universal and can be applied to different loans. The variation in EMI value occurs according to the three key variables, i.e. the loan amount, the loan tenure and the interest rate. The EMI payment is directly proportional to the loan amount and interest rates, which implies that with increase in amount and interest rate, the EMI on the loan also increases. However, the EMI is inversely proportional to the tenure of loan, which means that though the amount of paid interest increases with longer tenures, but the EMI payments decrease if the loan is repaid over a longer time period.

Calculate Loan EMIs Using Excel

You can also calculate your EMIs using the Excel spreadsheet. In Excel, you need to use the function PMT for calculating EMIs.

The formula which EMI calculator formula in excel uses the following syntax: PMT (rate, nper, pv).

The variables in the above formula are:
rate – Interest rate for the loan.
nper – Total number of payments for the loan.
pv – Present value/principal.

 

Calculate Loan EMIs Online Using Loan EMI Calculator

Online EMI calculator is a finance calculator which is available online and can be used to calculate your EMIs, compare EMIs for different loans and different tenures.


There are different types of EMI calculators based upon the types of loan such as
 

  • Car loan
  • Home loan
  • Personal loan
  • LAP
  • Education loan
  • Gold loan

Although each and every the EMI calculator works on the same three variables, you can use the EMI calculator which caters to your requirement.

 

Types of EMI Calculator

EMI Calculators can be of various types depending upon the loan you choose. You can find various EMI calculators for different loans on Paisabazaar and use them as per your requirement.

 

Home loan EMI calculator
 

The home loan EMI calculator is used to calculate the EMIs you pay in case of a home loan. While buying a home is a very important decision both financially and personally, taking a home loan requires a high degree of planning and research especially because of the loan’s long tenure and high loan principal amount. Paisabazaar’s Home loan EMI calculator has been designed to be user-friendly and it helps individuals calculate their home loan EMIs instantly. Home loans are sanctioned on the basis of the property cost and the borrower’s repayment capacity. They are long term loans which can be repaid up to a maximum of 30 years. Based on your personal requirements and eligibility criteria, you can input the loan amount, tenure and interest rate, in order to calculate your home loan EMI.

 

Car loan EMI Calculator
 

Car loan EMI calculator lets you know your car loan EMIs based upon the loan amount, tenure and interest rate. Lenders offer different schemes for buying cars, both new and old. Buying your dream car requires you to make a substantial investment which can be met through a car loan. But, you should keep in mind that the car loan amount borrowed has to be repaid back with interest within a stipulated time-period of up to 5 years. If you are not able to pay back the amount owed, then the lender can take away your vehicle and auction it off to recover the balance amount owed. Therefore, it is always best to use the Car loan EMI calculator, to figure out an EMI amount that you are comfortable paying back without straining yourself financially.

 

Personal Loan EMI calculator
 

Personal loans are “all-purpose loans”, which implies you can get a personal loan for any purpose, like funding your travel or medical expenses, etc. Being an unsecured loan, the interest rate is comparatively higher and the duration is shorter. The personal loan EMI calculator is the ideal tool which helps you assess your repayment capabilities and reach a loan amount which you are comfortable paying back. It works on the same parameters as other EMI calculators, such as the loan amount, tenure and interest rate. You can experiment with the EMI calculator to reach a loan amount which suits your requirements and which you can pay back with ease.

 

Education loan EMI calculator
 

The cost of education has skyrocketed and affording good education is becoming a difficult task for parents. Education loan funds the cost of education of a student within the country and also abroad, with repayments. With the help of Education loan EMI calculator you can calculate the amount which you will have to pay every month to satisfy the lent amount plus the accrued interest. The repayment in case of education loan does not start instantly but after a moratorium period, which is usually 6 months after course completion or after the student gets a job, whichever is earlier. However, there are usually a few benefits in case you plan to start servicing your education loan during the moratorium period.