EMI Calculator Online
EMI: 0
Total Payment: 0
Total Interest: 0
What is EMI?
EMI, or Equated Monthly Installment, refers to the fixed amount you need to pay every month to the bank or any financial institution until the entire loan amount is repaid. It consists of both the interest on the loan and a portion of the principal. The total sum of the principal and interest is divided by the loan tenure (number of months), and this amount is paid monthly.
The interest portion of the EMI is larger in the initial months and gradually reduces over time. Even though the total EMI remains constant, the proportion of principal and interest in the EMI changes with each payment. In the early stages, more of the payment goes toward interest, while later payments are more focused on the principal amount.
EMI Formula
The formula for calculating EMI is as follows: EMI=P×r(1+r)n(1+r)n−1EMI = P \times \frac{r(1 + r)^n}{(1 + r)^n – 1}
Where:
- E is the EMI
- P is the principal loan amount
- r is the monthly rate of interest (i.e., r=Annual Interest Rate12×100r = \frac{\text{Annual Interest Rate}}{12 \times 100})
- n is the loan term in months
For instance, if you borrow ₹10,00,000 at an annual interest rate of 10.5% for a loan term of 10 years (120 months), the EMI will be ₹13,493. This means you’ll pay ₹13,493 every month for 120 months, totaling ₹16,19,220, of which ₹6,19,220 is the interest.
Computing EMI manually or using Excel can be time-consuming and error-prone. An EMI calculator simplifies this process, instantly providing the result along with a breakdown of the payment schedule and a visual chart of total payments.
How to Use an EMI Calculator?
Our EMI Calculator is user-friendly, providing instant results along with colorful charts. It’s perfect for calculating EMI for various loans, such as home, car, personal, or education loans.
To use the calculator, enter:
- The principal loan amount (in rupees)
- Loan term (in months or years)
- Rate of interest (percentage)
- Whether the EMI is in arrears or in advance (for car loans only)
You can use the slider or input precise values manually. The EMI Calculator will immediately recalculate the monthly EMI amount.
The calculator also displays a pie chart showing the breakup of the total payment, indicating how much of the total amount is allocated to the principal and interest. Additionally, it provides a detailed payment schedule with interest and principal components for each year.
If you’re considering part prepayments to reduce your loan term and interest, use the Home Loan EMI Calculator with Prepayments. To calculate your loan eligibility or compare advertised versus actual loan interest rates, use the loan calculator.
Floating Rate EMI Calculation
For floating or variable-rate loans, it’s recommended to calculate EMI under two scenarios: optimistic (deflationary) and pessimistic (inflationary).
- Optimistic Scenario: Assume that the interest rate decreases by 1-3%. In this case, your EMI would decrease, or you may opt to reduce the loan tenure. This scenario helps you compare how an interest rate drop could impact your financial planning.
- Pessimistic Scenario: Assume that the interest rate increases by 1-3%. You need to evaluate if you can still afford the EMI with this increase, as even a small rise in the rate can significantly impact the monthly payment.
By considering both best and worst-case scenarios, you can plan better for the future and make informed decisions. It’s crucial to hope for the best while being prepared for the worst when making a long-term financial commitment.