Home Loan EMI Calculator

Home-loan-emi-CalculatorUse the Home Loan EMI Calculator below to calculate the EMI on home loan taken from bank or any financial institution. This Home Loan EMI Calculator requires some data like – Your Principal Amount taken from bank, Rate of Interest & Period (in No. of Months). After calculation you will get the Equated Monthly Installments (EMI).

If you are planning to buy a vehicle or a house and if you don’t have ready cash at your disposal, bank loans help you realise your dream. These bank loans can be repaid on a monthly basis in easy installments along with a small interest. This Free EMI calculator is a finance tool which will help you calculate monthly EMI as well as EMI interest payment on loans.

Please insert the PRICIPAL, RATE OF INTEREST and PERIOD to calculate the Equated Monthly Installments (EMI).

  

Principal Loan Amount :
Rate of Interest :
Period (in No. of Months) :

Equated Monthly Installments (EMI) :
* To be rounded-off to the next higher Rupee

What is EMI?

Equated Monthly Installment – EMI for short – is the amount payable every month to the bank or any other financial institution until the loan amount is fully paid off. It consists of the interest on loan as well as part of the principal amount to be repaid.

The interest component of the EMI would be larger during the initial months and gradually reduce with each payment. The exact percentage allocated towards payment of the principal depends on the interest rate. Even though your monthly EMI payment won’t change, the proportion of principal and interest components will change with time. With each successive payment, you’ll pay more towards the principal and less in interest.

Here’s the formula to calculate EMI:

CI

where:



E is EMI

P 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

What is Home Loan EMI?

EMI is the abbreviation for Equated Monthly Installment. Home Loan EMI is the monthly repayment that borrower should make to repay the home loan as per amortisation schedule.

How is the borrowed amount and interest due paid through EMIs?

Each EMI repays a part of principal i.e. the borrowed amount and the interest due on the borrowed amount. The proportion of each EMI utilised for repayment of principal and interest, however, varies over time.

Banks and financial institutions, in general, calculate EMI through a common mathematical formula. Thus, for a given loan amount, tenure and interest rate, the EMI calculated and the amortisation schedule offered by banks and Non-Banking Financial Companies (NBFCs) will typically be similar. This means that pattern of reduction of principal amount through payment of each EMI will typically follow similar trend across all financial institutions.

It is a well-known fact that the initial EMIs contribute more towards payment of interest due as compared to the principal amount. However, during the tenure of the loan, subsequent EMIs contribute more towards repayment of principal amount as compared to previous EMIs.

What is the benefit of calculating EMI?

Since EMI is the fixed amount that you will need to pay to the bank towards repayment of your Loan, calculating the EMI helps you to plan your monthly budget.

What is the impact of part payments on EMI?

Part payments reduce the outstanding loan amount, which in turn reduces the interest amount due. Without changing the EMI post part payment, the contribution of EMI towards principal repayment increases. Thus the loan gets repaid faster.


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