What is an EMI Calculator?
An EMI calculator is an online tool that computes the fixed monthly payment you need to make to repay a loan. It factors in three key variables:
- Loan Amount: The total borrowed amount.
- Interest Rate: The annual interest rate charged by the lender.
- Loan Tenure: The duration (in months or years) for loan repayment.
Using a mathematical formula, the calculator provides the EMI, total interest payable, and the overall cost of the loan.
How Does Our EMI Calculator Work?
Our EMI calculator is user-friendly and delivers results in seconds. Here's how to use it:
- Enter Loan Amount: Input the principal loan amount you wish to borrow.
- Specify Interest Rate: Provide the annual interest rate offered by your lender.
- Select Loan Tenure: Choose the repayment period in months or years.
- Get Instant Results: The calculator displays:
- Monthly EMI
- Total Interest Payable
- Total Amount Payable (Principal + Interest)
EMI Calculation Formula
The standard formula for calculating EMI is:
EMI = [P x R x (1+R)^N] / [(1+R)^N - 1]
Where:
- P = Principal loan amount
- R = Monthly interest rate (annual rate divided by 12, expressed as a decimal)
- N = Loan tenure in months
Example Calculation
Suppose you borrow ₹100,000 at an 8% annual interest rate for 5 years (60 months):
- P = ₹100,000
- R = 8% / 12 = 0.00667 (monthly rate)
- N = 60 months
Using the formula:
EMI = [₹100,000 × 0.00667 × (1+0.00667)^60] / [(1+0.00667)^60 - 1]
EMI ≈ ₹2,028.61Results:
- Monthly EMI: ₹2,028.61
- Total Interest Paid: ₹21,716.60 (₹2,028.61 × 60 - ₹100,000)
- Total Amount Payable: ₹121,716.60 (₹2,028.61 × 60)
Factors Affecting EMI
- Loan Amount (P): Higher principal increases EMI.
- Interest Rate (R): Higher rates raise EMI and total interest.
- Loan Tenure (N): Longer tenure lowers EMI but increases total interest paid.
Benefits of Using Our EMI Calculator
Manual EMI calculations can be complex. Our online EMI calculators simplify the process by:
- Providing instant results based on inputs (loan amount, interest rate, tenure).
- Helping borrowers compare loan options.
- Assisting in financial planning by estimating monthly commitments.
Frequently Asked Questions (FAQs)
What is an EMI?
An EMI (Equated Monthly Installment) is a fixed monthly payment made to repay a loan, covering both principal and interest.
What happens if I miss an EMI payment?
Missing an EMI can lead to penalties, increased interest, and a negative impact on your credit score. Consult your lender for solutions.
Can I reduce my EMI?
You can reduce EMI by:Increasing the loan tenure (increases total interest).Making a larger down payment to reduce the principal.Negotiating a lower interest rate.
Is the EMI fixed for the entire loan tenure?
For fixed-rate loans, the EMI remains constant. For floating-rate loans, EMI may vary with interest rate changes.