Loan EMI Calculator
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EMI is a fixed monthly payment that a borrower has to make to pay the bank or financial institution from which he took a loan. EMI has 2 parts, Principal Portion (the amount of loan you are repaying) and Interest Portion (the cost charged by the bank for lending money). The EMI remains constant throughout the loan tenure, but the ratio of principal and interest changes over time. Whether it is home loan, car loan, personal loan, education loan or gold loan a free EMI calculator instantly gives you the monthly payment, total interest payable and a complete year by year repayment schedule for any loan type.
EMI = [P × R × (1+R)^N] / [(1+R)^(N-1)] P = Principal loan amount R = Monthly rate of interest (i.e. annual rate divided by 12 and by 100) N = Number of monthly installments . This is the generic formula any online loan emi calculator uses. EMI = PV x i x [(1+i)^n/((1+i)^n-1)] where PV is present value of loan amount, i is interest rate for month in decimal and n is number of months of loan. This formula automatically calculates compound interest on the diminishing principal balance.
To use an EMI calculator, you have to enter three things – the loan amount (principal), the annual rate of interest and the loan tenure in months. This will give you your exact monthly outflow and interest total over the full term of the loan. If you opt for a longer repayment tenure, your monthly payments will be lower but the total payments will go up, as interest will be accrued over a longer period of time. You may also be hit with more fees or penalties that increase your debt. All you need to do is enter the loan amount, tenure and rate of interest on the loan and the tool will tell you the EMI amount instantly along with the total interest payable.
A few factors can impact the EMI of a loan. Loan Amount: The higher the loan amount, the higher the EMI (and vise versa) Interest Rate: The higher the interest rate, the higher the EMI Loan Tenure: The period you plan to repay the loan in months or years. The recurring payments are calculated on the principal + the added interest. If rates are higher , you will owe more If they are lower you pay less. You may be charged extra fees or penalties on the amount you owe. These can add up fast and increase what you owe over the life of the loan. loan emi calulator
A home loan amortization schedule is a detailed table that outlines how much of each monthly loan payment is applied to interest and how much is applied to reducing the principal loan balance over the life of the loan. In the first few EMIs, you will be paying a higher interest and this will reduce with each subsequent payment. The rate of interest determines the proportion of principal that will be repaid . A payment schedule table will help you plan your prepayments and understand the total cost of borrowing. It tells you how much you will be paying on a monthly and yearly basis for the loan. There’s also a chart of interest and principal components paid each year. Loan Emi Calculator
Fixed rate – The rate is fixed for the entire tenure (or for a specified period) so your EMI never changes – offers certainty but is usually a little higher initially. Floating rate: the rate is referenced to an external benchmark. Your rate goes with the index. Usually lenders extend tenure and keep EMI same but in many cases you can ask for EMI revision. Many longer term home loans are floating and many personal and car loans are fixed. Most banks don’t charge a prepayment penalty on floating rate loans, but check terms for fixed rate loans. Some lenders charge a penalty of 1%-3% of the prepayment. Loan Emi Calculator
Early payment helps save more interest in advance as it reduces the outstanding amount when the interest is maximum as percentage of EMI. Cutting tenure usually helps you save more on interest while cutting EMI helps your monthly cashflow. Choose what matches your goals. After pre-payment you have 2 options. You can choose to either reduce your EMI amount every month and pay for the same number of years OR reduce the tenure of your loan and pay the same EMI amount. Option 2 (shorten term length) Usually the better choice. It will also help you pay the loan off sooner and therefore pay less interest over the life of the loan.
Recommended EMI limit – Your total EMI commitments should not go beyond 40-50% of your take home income for the month. That guaranties financial stability and avoids overleverage. Having a debt to income ratio below 50% will help your chances of getting your loan approved. I would suggest you to calculate the equated monthly installments as per your financial capacity and repayment capacity. This will give you a fair idea about your EMI amount and you can plan your finances accordingly. There is no chance of miscalculation with a loan EMI calculator and you will get the right estimate every time.
In the first few months of your EMI, you will be paying higher interest which will reduce with every further payment. The exact amount of the principal to be repaid depends on the interest rate. With an amortized loan the interest is front-loaded so if you make your prepayment early i.e. in the first few years you can significantly cut down on your total interest outflow . For example, if you pay an extra amount toward the principal in Year 1, you can save a huge amount in interest over the entire tenure. Some of the borrowers think that after paying EMIs for a few years, they would have paid a good part of the loan. But due to amortization, in the first few years, most of the payment is for interest, and not for reducing the principal.
An Auto Loan EMI calculator helps you to plan your monthly payments for a new or used vehicle Loan Tenure which is usually 1-7 years. A Personal Loan EMI calculator assists customers to plan finances for any personal need such as education or medical emergencies with a typical tenure ranging from 1 to 15 years. We have free EMI calculator for all major types of loans like home loans, personal loans, car loans, 2 wheeler loans, education loans, loan against property and gold loans. Calculator for all loans without registration. See monthly payment, total interest and payment schedule.