Equated Monthly Installment (EMI) Calculator
Loan Amount
Interest Rate
%
Term (Months)
Monthly Payment (EMI)
21,247.040
| Periods | Principal Paid | Interest Paid | Remaining Loan |
|---|---|---|---|
| 1 | 12913.71 | 8333.33 | 987086.29 |
| 2 | 13021.32 | 8225.72 | 974064.97 |
| 3 | 13129.83 | 8117.21 | 960935.14 |
| 4 | 13239.25 | 8007.79 | 947695.89 |
| 5 | 13349.57 | 7897.47 | 934346.32 |
| 6 | 13460.82 | 7786.22 | 920885.5 |
What is EMI Calculator?
An EMI (Equated Monthly Installment) Calculator is an online tool that helps you estimate the monthly installment you would have to pay for a loan. It calculates the EMI based on the loan amount, interest rate, and tenure of the loan. The EMI consists of both the principal amount and the interest accrued on the loan, which is spread over the tenure of the loan. Using an EMI calculator can help you plan your finances better by giving you an estimate of the amount you would need to set aside each month to pay off your loan, and can also help you compare different loan options to find the one that best suits your needs.
How to use EMI Calculator?
To use a EMI Calculator, follow these simple steps:
- Enter the loan amount you want to borrow.
- Enter the interest rate offered by the lender.
- Enter the loan term or the number of years for which you want to borrow the loan.
- Get the EMI amount.
EMI Formula and Calculation with Example
The formula for calculating EMI is:
EMI = [P x R x (1+R)^N] / [(1+R)^N-1]
Where:
P = Loan amount or principal
R = Interest rate per month
N = Number of monthly instalments
Here's an example of how to calculate compound interest:
For example, let's say you take out a loan of $100,000 at an interest rate of 10% per annum, to be repaid over a period of 5 years (60 months).
P = $10,000
R = 8%
T = 5 years
CI = P(1 + R/100)^T - P
CI = $10,000(1 + 8/100)^5 - $10,000
CI = $4,661.28
The compound interest earned over the 5-year period is $4,661.28.
To calculate the total amount you will have at the end of the 5-year period, we need to add the compound interest to the principal amount.
First, we need to calculate the monthly interest rate:
R = 10%/12 = 0.00833 (rounded to 5 decimal places)
Next, we can plug in the values into formula:
EMI = [100000 x 0.00833 x (1+0.00833)^60] / [(1+0.00833)^60-1]
EMI = $2,124.28 (rounded to 2 decimal places)
Therefore, your monthly instalment payment will be $2,124.28 for a period of 5 years to repay the loan of $100,000 at an interest rate of 10% per annum.
Benefits of using EMI Calculator
- Accurate results: The EMI Calculator at basiconlinetools.com uses a precise formula to calculate the Equated Monthly Installment (EMI), ensuring that the results are accurate and reliable.
- Time-saving: The calculator provides instant results, saving time and effort in manual calculations.
- Customizable variables: The calculator allows users to customize variables such as the loan amount, interest rate, and tenure, making it easy to calculate the EMI for different loan scenarios.
- Budget planning: The calculator helps in budget planning by providing an estimate of the monthly EMI amount for a loan based on the variables selected.
- Loan comparison: The calculator allows users to compare the EMI amounts for different loan scenarios, helping in making informed loan decisions.
- Educational value: Using the calculator can help enhance knowledge about financial concepts like loan amortization, interest rates, and tenures.
- User-friendly interface: The EMI Calculator at basiconlinetools.com has a simple and user-friendly interface, making it easy for anyone to use, even those with limited financial knowledge.
- Free to use: The EMI Calculator at basiconlinetools.com is completely free to use, with no hidden fees or charges.
Limitations of using EMI Calculator
- Assumption of fixed interest rate: The calculator assumes a fixed interest rate throughout the loan period, which may not always be the case in real-world scenarios.
- No consideration for compounding: The calculator does not take into account compounding, which can result in a significant difference in the total interest paid.
- Limitations in input options: The calculator may have limited input options, which may not allow for customization of certain variables that may affect the EMI calculation.
- Does not consider fees and charges:The calculator does not take into account any fees and charges associated with the loan, which can affect the actual EMI amount.
- Estimation-based results: TThe calculator provides estimation-based results, which may not always be accurate, especially when the loan period is long or the interest rate changes frequently.
- No guarantee of future returns: The calculator cannot guarantee the future interest rates on the loan, as they are subject to market fluctuations and other external factors.
- Does not account for inflation: The calculator does not factor in the impact of inflation on the value of money over time.
- Assumes a constant EMI: The calculator assumes that the EMI amount remains constant throughout the loan period, which may not always be the case in real-world scenarios.
Frequently Asked Questions
What is an EMI?
An EMI stands for Equated Monthly Installment. It is a fixed amount of money that a borrower has to pay to a lender every month to repay a loan or debt.
What is the difference between reducing balance method and flat rate method?
Reducing balance method calculates interest on the outstanding loan amount, whereas the flat rate method calculates interest on the entire loan amount. The reducing balance method is more beneficial for borrowers as it results in a lower interest payout over the loan tenure.
What is the impact of the loan tenure on the EMI?
The loan tenure has a direct impact on the EMI. Longer loan tenures result in lower EMIs but higher interest payouts, whereas shorter loan tenures result in higher EMIs but lower interest payouts.
What is the impact of the interest rate on the EMI?
The interest rate has a direct impact on the EMI. Higher interest rates result in higher EMIs and vice versa.
What is the impact of the loan amount on the EMI?
The loan amount has a direct impact on the EMI. Higher loan amounts result in higher EMIs and vice versa.
Can I use the EMI calculator for different types of loans?
Yes, you can use the EMI calculator for different types of loans such as home loans, car loans, personal loans, etc.
Can I use the EMI calculator for calculating the prepayment of a loan?
No, an EMI calculator cannot be used for calculating the prepayment of a loan. For prepayment calculations, you need to use a separate prepayment calculator.
Can I use the EMI calculator offline?
No, an EMI calculator is an online tool and requires an internet connection to work.
Is the EMI calculator accurate?
Yes, the EMI calculator is accurate if you enter the correct inputs such as loan amount, interest rate, and loan tenure.
Can I rely on the EMI calculator for loan planning?
Yes, you can rely on the EMI calculator for loan planning. However, you should keep in mind that the actual EMI may differ slightly from the calculated EMI due to rounding off of the interest rate or loan tenure.