What is EMI?
Equated Monthly Instalment or EMI is the amount that the borrower pays every month to repay their loan amount. The EMI has two components – the principal and therefore the interest. Usually, on a fixed date of every month, the lender pay the amount.
How is EMI calculated?
We calculate EMI using the mathematical formula,
EMI = p*r*(1+r)n/((1+r)n-1) where
P- loan amount
R- interest rate
n- tenure in number of months
For example, the EMI for a principal amount of 1 lakh, 10% interest rate and 12 months tenure is Rs.8792.
EMI payments is directly proportional to the loan amount and interest rates and is inversely. Higher the loan amount/interest rate, higher the EMI payments and the other way around. In the case of loan tenure, though the amount of total interest to be paid increases with the increase in loan tenure the EMI payment decreases with increase in loan tenure.
What is EMI calculator?
EMI calculator is a tool that accurately calculates the EMI amount for a particular loan amount. EMI Calculators has the following factors, Loan amount, Loan tenure and Interest rate.
For example, a home loan amount of 10,00,000, loan tenure of 11 years with an interest rate of 10.5%. For the above scenario, the EMI calculator calculates the EMI amount as RS. 12,804, the interest amount is Rs. 6,90,189, and the total payment amount (principle+interest) is Rs. 16,90,189.
The EMI calculator is helpful to calculate various types of loans such as car loans, home loans, and personal loans. In this digital world, you can easily find a Home loan calculator, Car loan calculator and even Personal loan calculator that could calculate the EMI with interest rates by entering proper inputs.
The important factors in an EMI calculator
Loan amount – the amount that is borrowed from any bank or financial institutions
Interest rate – percentage of amount that is to be paid charged by the bank or any financial institutions.
Loan tenure – the term loan tenure is the time period for which the loan is sanctioned.
Usually, personal and car loans have a shorter loan tenure period when compared to home loans. Some financial institutions offer the facility to extend the loan tenure for an extra fee or increase in the interest rates.
Benefits of EMI calculator
Let us check out the varied benefits of an EMI calculator,
Convenience – Calculations are made easier with this online tool when compared to manual calculations. You will get your results in no time with some necessary inputs.
Accuracy – Manual calculations may go wrong at times. Here, you can perform the calculations with 100% accuracy.
Fast Calculation – You will receive your results in no time but the same cannot be expected through manual calculations. As you may have a situation where the calculations needs to be rechecked when done manually.
Graphical representation – A graphical representation guides with a better understanding. Most of the online calculations simply provide you the details regarding your loan. These EMI calculators displays a graphical representation with the required inputs for more clarity.
Amortization Table – This is the most important and essential information that will show you the progress of the loan overtime. It also predicts your balance/interest cost at any point in future.
EMI calculators help you in calculating the EMI amount to be paid for any types of loan such as home loan, car loan and personal loan which would produce perfect results for your planning. Each type of loan is calculated with the respective inputs. In this digital world you can find various EMI calculators like, Home loan calculator, Car loan calculator and Personal loan calculator. Calculate your EMI with the most flexible tool EMI calculator and execute your plan.
FAQs on EMI calculator
Why should I use EMI calculator?
EMI calculator makes your requirement faster, convenient and accurate. It is the tool that can withstand multiple calculations. You will receive accurate outputs for the inserted inputs.
Does the EMI calculator produce the same result as that of the bank applications?
The calculating process is the same using the mathematical procedure but there might me slight difference in the results as the interest rates and processing fee varies.