EMI Calculator

Online EMI Calculator - Calculate EMIs Of All Types of Loans

With the concept of EMI, luxury became more accessible. Whether you want to buy a car or a home (or an iPhone, for that matter) - thanks to EMIs, you can easily do so without exhausting your finance. 

In fact, post-pandemic, the trend of EMI purchases shot up significantly. To be precise, India witnessed a whopping 220% surge in EMI transactions ever since Covid knocked at our doors. 

But while it’s convenient to shop for something on EMI, calculating the due instalment amount every month can be a hassle. This is exactly where an online EMI calculator can come in handy.

Busting the jargon - What is an EMI?

EMI, or “Equated Monthly Instalment”, is an incredible way to make a credit purchase easily.

How? Let’s understand in detail. 

Every EMI consists of two parts - the principal and the interest. Suppose you buy a car for ₹4,00,000 on EMI. Here’s what your monthly EMI amount would look like, considering the payback period is 5 years and the interest rate is 12% pa.

Year	Principal (₹)	Interest (₹)	Total EMI (₹)	Loan Balance
2023	62,116	44,657	1,06,773	3,37,884
2024	69,994	36,779	1,06,773	2,67,890
2025	78,871	27,903	1,06,774	1,89,018
2026	88,874	17,900	1,06,774	1,00,144
2027	1,00,145	6,628	1,06,773	0

Note: This chart does not include the processing fees charged by banks.

Now, here’s an interesting observation that you should pay attention to. As you can see, the interest is higher than the principal in the initial years. However, as each instalment is paid, the tables turn - the interest amount decreases, and the principal goes up, relaxing the overall loan burden. 

So, in a nutshell, the gist of EMI payments is simple. You are obligated to pay a fixed amount to your lender every month on a fixed date as loan repayment. This monthly payment will continue until your decided loan tenure ends, eventually exhausting your entire credit amount. 

While a part of your EMI amount is the principal, a fraction of this amount also includes the interest on your loan. However, several financial institutions also provide “No Cost EMI” facilities. Under this scheme, no interest rate is levied on the loan amount. This implies the EMI amount is just the total loan amount divided into small monthly blocks.

Plan better EMIs - essential factors to check before picking an EMI plan

Yes, EMIs are super convenient. But why just stop there? Take the following factors into account before picking an EMI plan and every month, pay just the amount you want as your EMI;

• Loan tenure: The tenure of your loan drastically affects your EMI amount. As the loan tenure prolongs, the interest payable also shoots up, thereby increasing the monthly EMI amount. So, to put it in perspective, if you want to pay less in the form of EMI interest, you should opt for a loan tenure that’s short. On the contrary, if your borrowed amount is humongous and you want to pay it back in small bursts, extend your loan tenure as it will allow you to do so.  
• Interest rate: This doesn’t even need any explanation. If you get a loan at a low rate of interest, your per-month EMI amount will also be small. If you choose a loan with a high-interest rate, your EMI total every month will also go up. 
• Loan amount: Your total loan amount plays a significant role in deciding how much principal you’ll pay monthly towards EMI. So it’s a no-brainer - the lesser the loan amount, the lesser the EMI and vice versa. 

EMI calculators - what are their benefits? 

An EMI calculator comes with a bunch of advantages that you may not be aware of. Let’s check them out;

• Accurate results: AI is taking over the world. But while you should be wary about using it for other purposes, you can definitely entrust it with calculating your monthly EMIs. After all, online EMI calculators are accurate, flexible, and easy to use. 
• Time-saving: Manual EMI calculations eat up a lot of time. And that’s not always a feasible option. But thanks to EMI calculators available on the web, now you just have to enter the input and blink. In less than a minute, you’ll have your entire annual EMI summary right on the screen. 
• No manual calculation: Perhaps the biggest advantage that tags along with an EMI calculator! Manual EMI calculations are not only time-consuming, but they’re also highly error-prone. To root out this risk, use an EMI calculator. You’ll have faster and more accurate results without all that head-scratching. 
• Easily accessible: There are a lot of EMI calculators available online. Whether you want one to compute your personal loan, car loan, or home loan EMIs - each variety of EMI calculator is easily accessible and super easy to use.  
• Helps in financial planning: Online EMI calculators facilitate better loan planning. If you are yet to take a loan but are curious about which plan will work the best for you, simply enter your desired loan tenure and rate of interest in the calculator. The results will better assist you in deciding which kind of plan is suitable for you.  

How does an EMI calculator work?

It’s very easy to use an EMI calculator for computing monthly loan EMIs. For instance, if you want to calculate your car loan EMI, you just need the following three inputs;

• Car Loan Amount: The total loan amount you are borrowing to purchase the car. 

• Loan Tenure: The time period for which you will take the loan, i.e., 5 years, 8 years, etc. 
• Interest Rate: The rate at which you will be paying the interest on your borrowed loan amount, i.e., 10% or 12%, etc. 

And that’s it! After you enter the following data, the EMI calculator will automatically furnish your annual EMI summary. 

However, if you’re curious to know which formula does the calculator use to arrive at the EMI figures, here’s the formula of how to calculate EMI;

Equated Monthly Instalment = p x r x (1 + r)n/((1 + r)n - 1)

here,   p = your total loan amount

r = rate of interest

n = the number of months you’ve taken the loan for/your loan tenure expressed in months 

How are EMIs calculated for floating interest rates? 

The previous EMI calculation formula applies to loans with fixed interest rates. But, if you have taken a loan at a floating interest rate, the calculation will also differ.

In essence, a floating interest rate means a rate of interest on a loan that changes as per the index or the current market value. Many factors contribute to this fluctuation in the interest rate - inflation, repo rate, fiscal deficit, etc. 

As such fluctuations depend on many external factors, it cannot be predicted whether the interest rate will shift to a high or a low. Thus, in the case of a floating interest rate, you should calculate your EMIs assuming the following two scenarios -

• Pessimistic scenario: Consider the interest rate to go up by a fair 1%-2%. If your current interest rate is 10%, your new interest rate will be (10+2)% = 12%. Insert this new rate in the EMI calculator, and you will find the desired result. 
• Optimistic scenario: Assume the interest rate decreases by 1%-2%. Keeping this in mind, insert the new interest rate in the calculator, and you will arrive at the correct EMI calculations.

Types of EMI calculators available online

There are various types of EMI calculators in India. Some of the most popular EMI calculators include;

• Personal loan EMI calculator: When you take a loan to satiate your personal financial needs, it comes under the purview of a personal loan. For instance, if you need a loan to meet your medical expenses or wedding expenses, you have to apply for a personal loan. Generally, personal loan amounts are nominal. One cannot take a personal loan of more than ₹35 lakhs in India. How to calculate personal loan EMI?To assess your monthly personal loan EMI, you only need to enter your personal loan amount, loan tenure, and rate of interest in the Personal Loan EMI calculator. You will instantly receive your yearly personal loan EMI breakdown. 

• Home Loan EMI Calculator:As the name suggests, a home loan is a loan you take to buy a house or a residential property. A home loan amount is normally huge, ranging anywhere from 10 lakhs to 10 crores or even more, depending on the property. Naturally, the tenure of such loans is also very long, generally between 10-30 years. How to calculate Home Loan EMI?To calculate your home loan EMI, simply furnish your total home loan amount, loan tenure, and the rate of interest in the Home Loan EMI calculator. As you do so, your annual EMIs will appear on the screen. 

• Car Loan EMI Calculator: Remember when we said every luxury is now available for everyone? Car loan EMIs are the perfect example of this. If you think you cannot afford to buy a new Honda, just take a car loan and pay back the amount in EMI.How to calculate car loan EMI?To calculate how much EMI you will have to pay every month towards your car loan, simply enter your total car loan amount, loan interest rate, and tenure. And that’s it - your Car Loan EMI Calculator will give you a summary of your total loan EMIs. 

• Education Loan EMI Calculator: With the cost of education gradually rising up in the country, more and more people are taking education loans to study at premium institutions. These loan amounts can vary depending on the degree of education and have a longer tenure. Generally, education loan EMIs are extremely flexible. As a borrower, you only need to start paying the EMIs after your moratorium period is over. How to calculate education loan EMI?To compute your monthly education loan EMI post-moratorium period, you just need details regarding your education loan amount, loan tenure, and interest rate. The Education Loan EMI Calculator will present the exact EMI amounts you need to pay every year. 

• Mortgage Loan EMI Calculator: When you take a loan against an immovable asset, like a commercial or residential property, it’s called a mortgage loan. These loans are also called secured loans, as the lender has collateral security that they are fully entitled to take over if you fail to pay back the loan. But the good news is that you can also pay back these loans in EMI.How to calculate mortgage loan EMI?To arrive at your mortgage loan EMI, enter the loan amount, loan tenure, and interest rate. The Mortgage Loan EMI Calculator will give you an accurate breakdown of your annual EMI arrears. 

Conclusion

With EMIs becoming one of India’s most preferred payment methods, we’re sure you’re not too far away from making your next big purchase on EMI and riding this bandwagon. 

And when you do so, don’t take up the extra hassle of computing monthly EMI amounts all by yourself. Use our online EMI calculator to calculate your EMIs easily, quickly, and accurately