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EMI Calculator
If you’re planning your budget, this guide will help you understand everything about the EMI calculator.
What is EMI?
EMI (Equated Monthly Installment) is the amount paid each month to repay the loan. This includes both the principal and interest. You continue paying EMI payments until the loan is repaid.
What is an EMI Calculator?
An EMI calculator is an online financial tool that helps you easily calculate your loan EMI. It helps you plan your monthly payments for a home loan, car loan, or personal loan. It helps you calculate your monthly EMI based on the following factors:
- Loan Amount
- Interest Rate
- Loan Tenure (in months or years)
EMI Calculation Formula
The EMI is calculated using the formula:
EMI = [P x R x (1+R)^N] / [ (1+R)^N – 1]
- P = Loan Amount
- R = Monthly Interest Rate (Annual Rate ÷ 12 ÷ 100)
- N = Loan Tenure (in months)
This formula may seem difficult to you but with the help of EMI Calculator you can calculate it in just a few seconds.
Example of EMI Calculation
Let’s understand with a simple example:
- Loan Amount = ₹5,00,000
- Interest Rate = 9% per year
- Tenure = 5 years
Using an EMI Calculator, your EMI will be approximately:
- Monthly EMI ≈ ₹10,379
- Total Interest ≈ ₹1,22,751
- Total Payment ≈ ₹6,22,751
This will help you understand and plan your repayment burden before taking a loan.
How to use an EMI Calculator?
You can understand how to use it in this way:
Step 1:
Enter the Loan Amount
Step 2:
Enter the Interest Rate (% p.a)
Step 3:
Select the Loan Tenure (Years or Months)
Step 4:
Click on Calculate EMI
The tool will instantly show:
- Monthly EMI
- Total Interest
- Total Amount Payable
Step 5:
Click on Download EMI PDF, you can also download its PDF
Why EMI Calculator is important?
There are many people who take loans without proper planning, due to which they feel stressed later as it becomes difficult to manage the EMI. An EMI Calculator helps you:
Budget Planning
It tells you the exact monthly payment so that you can easily manage your expenses and make the right EMI plan as per your budget.
Compare Banks
You can make the right choice of EMI based on the interest rates of different banks.
Time savings and Accuracy
Manual calculations are error-prone and time-consuming, but they give you quick and accurate figures.
Avoid Financial Stress
This helps you avoid taking loans beyond your capacity, which helps you avoid financial stress