Effortlessly estimate your monthly loan payments (EMI) with our free calculator! Plan for your dream car, home, or any big purchase. Compare loan options and make informed financial decisions.
An EMI Calculator (Equated Monthly Installment) is a financial tool that computes the fixed monthly repayment amount on a loan, incorporating principal and interest. It helps borrowers plan and manage their finances by providing insights into loan repayment schedules.
What is EMI?
EMI, or Equated Monthly Installment, is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. It comprises both principal and interest components, ensuring a gradual repayment of a loan, commonly used for mortgages, car loans, or other installment-based financial arrangements.
EMI Calculator Formula
The formula to calculate Equated Monthly Installment (EMI) is:
How to Calculate EMI ?
To compute Equated Monthly Installment (EMI), employ the formula: EMI = [P * r * (1 + r)^n] / [(1 + r)^n – 1]. Here, P denotes the loan amount, r represents the monthly interest rate (annual rate divided by 12 and converted to a decimal), and n is the loan tenure in months. This formula facilitates the systematic repayment of a loan over time.
Example:
Loan amount ((P)): ₹15,00,000 Annual interest rate ((r)): 8% Loan tenure ((n)): 15 years (180 months) -Using the formula, we can calculate the monthly EMI: EMI = ₹15,00,000 * 0.008 * (1 + 0.008)^180 / ((1 + 0.008)^180 - 1) = ₹13,982. You’ll repay ₹13,982 monthly for 180 months, resulting in a total repayment of ₹25,16,760, including ₹10,16,760 as interest.
How to Use EMI Calculator?
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Input Loan Details:
- Start by entering the loan amount you intend to borrow from the financial institution.
- Next, input the rate of interest agreed upon by your lender. This represents the annual interest rate at which you’ll be borrowing the money.
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Determine Loan Tenure:
- Decide on the loan tenure, which is the total duration in months for which you plan to take the loan.
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Calculate Monthly Interest Rate:
- Divide the annual interest rate by 12 to obtain the monthly interest rate (since the interest is calculated monthly).
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Compute the EMI:
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Utilize the following formula to calculate the Equated Monthly Installment (EMI): [ \text{EMI} = \frac{{P \cdot r \cdot (1 + r)^n}}{{(1 + r)^n – 1}} ] Where:
- (P) represents the principal amount (loan amount).
- (r) denotes the monthly interest rate (annual interest rate divided by 12).
- (n) stands for the number of monthly installments (loan tenure in months).
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Utilize the following formula to calculate the Equated Monthly Installment (EMI): [ \text{EMI} = \frac{{P \cdot r \cdot (1 + r)^n}}{{(1 + r)^n – 1}} ] Where:
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Validate the Result:
- Double-check your calculation to ensure consistency and accuracy.
- Confirm that the EMI aligns with the loan terms provided by the lender.
Features of EMI Calculator
- Accurate Loan Planning: Precisely calculate monthly EMIs, aiding borrowers in planning repayment schedules for loans with varying amounts, tenures, and interest rates.
- Dynamic Visualization: Instantly visualize the impact of changes in loan amount, tenure, and interest rate, empowering users with dynamic and insightful EMI variations.
- Responsive User Interface: Enjoy a seamless experience with a responsive interface that adapts effortlessly to different devices, providing accessibility and ease of use.
- Comprehensive Financial Insights: Gain comprehensive financial insights with a detailed breakdown of loan components, including principal, interest, and total repayment, enhancing financial decision-making.
EMI Calculator – FAQs
What is an EMI Calculator?
An EMI Calculator is a tool that helps you calculate the Equated Monthly Installment (EMI) for a loan. EMI is the fixed amount you pay to the lender every month until the loan is fully paid off1.
How does an EMI Calculator work?
An EMI Calculator works by taking the principal loan amount, the interest rate, and the loan tenure as inputs, and then it calculates the EMI, which is the fixed amount you need to pay every month1.
What is the formula used by the EMI Calculator?
The EMI Calculator uses the formula: EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where P is the principal loan amount, R is the monthly interest rate, and N is the number of installments1.
Can I use the EMI Calculator for different types of loans?
Yes, you can use the EMI Calculator for different types of loans like home loans, personal loans, car loans, etc1.
Is it free to use an EMI Calculator?
Yes, most online EMI Calculators are free to use