Accurate EMI Calculations at Your Fingertips
**Note: For exceeding 120 no. of payments, a group of 12 payments will be combined into a single payment number for better chart visibility.
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What is EMI?
Equated Monthly Installment (EMI) is the fixed amount you pay each month to the bank or financial institution until your loan is fully repaid. This payment includes both the interest and a portion of the principal amount. The total of the principal and interest is divided by the loan tenure, or the number of months over which the loan is to be repaid, and this sum is paid monthly. In the early stages, the interest portion of the EMI is higher, gradually decreasing with each payment, while the principal portion increases. Although your EMI remains constant, the allocation between principal and interest shifts over time, with more going toward the principal in later payments.
Here’s the formula to calculate EMI:
where,
EÂ is EMI
PÂ is Principal Loan Amount
r is rate of interest calculated on monthly basis. (i.e., r = Rate of Annual interest/12/100. If rate of interest is 10.5% per annum, then r = 10.5/12/100=0.00875)
n is loan term / tenure / duration in number of months
For example, if you borrow ₹10,00,000 from the bank at 10.5% annual interest for a period of 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 that includes ₹6,19,220 as interest toward the loan.
How to Use EMI Calculator?
Our EMI Calculator features vibrant charts and delivers instant results, making it easy to use, intuitive, and fast. You can calculate EMIs for various types of loans, including home loans, car loans, personal loans, education loans, and other fully amortizing loans.
To use the EMI Calculator, enter the following details:
- Principal loan amount (in rupees)
- Loan term (in months or years)
- Rate of interest (in percentage)
- EMI in arrears or EMI in advance (for car loans only)
Adjust the values using the slider or enter them directly into the input fields. As you make changes, the calculator will instantly update your monthly EMI amount.
The calculator displays a pie chart showing the breakdown of total payments, illustrating the proportion of total interest versus principal. It also provides a payment schedule table, detailing monthly or yearly payments over the loan term, and a chart showing the yearly breakdown of interest and principal payments. Initially, a larger portion of each payment goes towards interest, but over time, more of each payment is applied to the principal. The schedule includes the outstanding balance for each year, carried forward to the next.
Looking to make part prepayments to shorten your home loan term and reduce total interest? Try our Home Loan EMI Calculator with Prepayments. If you need to determine how much loan you can afford or compare advertised versus actual loan interest rates (including APR), use our loan calculator.
Floating Rate EMI Calculation
We recommend calculating your floating or variable rate EMI by considering both optimistic (deflationary) and pessimistic (inflationary) scenarios. While you can control the loan amount and tenure—deciding how much to borrow and the duration of the loan—the interest rate is determined by banks and housing finance companies based on RBI policies. Evaluating these two extremes will help you determine an affordable EMI, suitable loan tenure, and the appropriate loan amount.
Optimistic (Deflationary) Scenario: Assume the interest rate decreases by 1% to 3%. Calculate your EMI under this scenario to see how your payments might reduce or how you could potentially shorten your loan tenure. For example, if you’re taking out a home loan for investment purposes, this scenario allows you to assess how this change could affect your investment compared to other opportunities.
Pessimistic (Inflationary) Scenario: Conversely, assume the interest rate increases by 1% to 3%. Determine if you can comfortably manage the higher EMI. Even a 2% increase in the rate can significantly impact your monthly payments over the loan term.
By planning for both best and worst-case scenarios, you prepare yourself for future interest rate fluctuations. Taking out a loan is a long-term financial commitment, so it’s crucial to be ready for both favorable and challenging conditions. In essence, aim for the best but be prepared for the worst.
Disclaimer:
The repayment amount shown using this calculator is an estimate, based on information you have provided. It is provided for illustrative purposes only and actual repayment amounts may vary. To find out actual repayment amounts, contact us. This calculation does not constitute a quote, loan approval, agreement or advice by My Finance. It does not take into account your personal or financial circumstances.
