What is EMI?
The Equated Monthly Installment, or EMI, is the monthly payment made to the bank or other financial institution until the debt is entirely paid off. It comprises loan interest as well as a portion of the principal amount to be returned. The sum of the principal and interest is divided by the loan’s duration or the number of months it must be replaced.
This sum must be paid every month. The interest component of the EMI would be higher at the beginning and progressively decrease with each payment. The interest rate determines the precise percentage allocated to a principal amount. While your monthly EMI payment will remain constant, the proportion of principal and interest components will fluctuate over time.
The simple mathematical formula for calculating EMI is: EMI = P r (1 + r)n/((1 + r)n – 1) where P= loan amount, r= interest rate, and n=term in months.
E means EMI
P means Principle loan amount
R means Rate of Interest
N means Tenor or duration.
What is the complete form of EMI?
EMI Stands for Equated Monthly Installment.
How to Use EMI Calculator?
Our EMI Calculator is simple to use, easy to comprehend, and quick to use, with Smart charts and immediate results. Using this calculator, you may calculate the EMI for a house loan, a vehicle loan, a personal loan, an education loan, or any other completely expensing loan.
Enter The Information in the Emi Calculator:
- The principal loan amount that you will get
- Rate of Interest of your Loan amount
- Loan Tenure or Month
And you will get the Result of your Loan amount that you need to pay with Interest rate and principal.
You can easily understand through a color pie chart. It shows the ratio of total interest against Principle in the sum of all payments made on loan. In addition, the payment schedule table is presented, along with a chart displaying the interest and principal components paid each year for the whole loan period.
The interest component of each payment is deducted, and the remainder is applied to the Principle debt. Thus, during the first year of the loan, a substantial percentage of each payment is allocated to interest. Over time, more significant amounts of the principal are paid off. The payment schedule also displays the outstanding intermediate debt for each year, carried over to the following year.
What is the Benefit of the EMI Loan Calculator?
The benefit of the Emi Loan Calculator:
- You can understand quickly through Calculation.
- EMI Calculator show you everything that you need to pay (Principal +Interest amount)
- Clearly understand through Pie Chart
How to decide the Rate of EMI Calculation?
Loan amount and loan tenure, two components necessary to compute the EMI, are under your control; that is, you will select how much loan you need to borrow and how long your loan should be. However, banks and HFCs determine interest rates depending on the RBI’s rates and regulations.
Here as a customer, you should examine the two extreme possibilities of interest rate increases and decreases and calculate your EMI under these two situations. This calculator will assist you in determining how much your EMI is manageable, how long your loan term should be, and how much you should borrow.