Equated Monthly Instalment (EMI) is an amount payable every month to the bank or the other financial organization from which the loan has been taken. This systemic payment continues till the entire loan has been paid off. The repayment amount consists of the interest component that has to be paid in addition to the outstanding principal amount.
This repayment amount (principal along with interest) is split over the tenure of the loan, (i.e., range of months). The value so determined is known as the instalment. This calculated amount i.e., Instalment, must be paid monthly.
Now, the interest portion of the EMI would be higher during the initial months of the repayment period and reduced proportionately with every payment throughout the loan’s tenure.
The precise proportion allotted towards payment of the principal depends on the rate of the loan. Even though your monthly EMI payment will not modify, the ratio of principal and interest parts can modify with time. With every serial payment, you may pay a higher sum towards the principal component of the loan than the interest component.
Our EMI Calculator is simple to use, intuitive to know and is fast to perform. You can calculate EMI for the equity credit line, car loan, consumer loan, education loan, or the other amortizing loan in this calculator. You can get instant results.
Enter the subsequent data within the EMI Calculator:
Use the slider to regulate the values within the EMI calculator.
In a representative chart process, the total payment break-up (i.e., total principal vs. total interest payable) is also displayed. It displays the share of total interest versus principal quantity within the collection of all payments created against the loan.
The payment schedule table showing payments created monthly / annually for the entire period of the loan is displayed alongside a chart showing interest and principal amounts paid every year. A portion of every payment is towards the interest whereas the rest is applied towards the principal balance. Throughout the initial repayment period, a higher portion of every payment is dedicated to the loan’s interest component. With the passage of your time, a higher portion is towards repayment of the principal. The payment schedule conjointly shows the outstanding intermediate balance for every year, which you can carry over to the consecutive year.
Want to form half prepayments to shorten your equity credit line schedule and cut back your total interest outgo? Use our equity credit line EMI Calculator with Prepayments.
If you want to calculate what proportion loan you’ll afford OR verify publicized vs actual loan charge per unit (along with loan APR) on a procurement, use our loan calculator.
EMI means Equated Monthly Instalment for the loan you get from your bank. The EMI includes the principal portion of the loan amount as well as the interest. Therefore, EMI = principal amount + interest paid. The EMI, generally, remains fixed for the complete duration of your loan, and it’s to be repaid over the tenure of the loan on a monthly basis.
How is EMI calculated?
According to Mathematics, EMI is calculated as:
P = Principal
R = Rate of interest
N = number of instalments.
The variables together with the processing fee are needed for your EMI.
Complicated? Don’t worry! Use India company incorporation’s EMI Calculator. It’s an automatic tool that makes loan planning easier for you. These are the five benefits of using the EMI calculator:
Do note that you pay more interest in the initial years of your loan duration, and gradually, as you repay the loan, a bigger portion is adjusted towards the principal component (see table below). This is because EMIs are computed on a reducing balance method, which works in your favor.
To calculate EMI click and drag or type in the EMI calculator’s amount, percentage of interest and duration to best adjust them to your requirement.
The EMI calculator will automatically determine figures applicable for the loan.
Suppose your loan could be a floating rate loan and therefore, the rate of interest reduces during the duration of your loan. In that case, a better amount is adjusted towards the principal amount, and also the loan gets repaid earlier.
Conversely, when the charge per unit increases, a more significant portion is adjusted towards the interest component than the principal; this might slightly change in loan duration, assuming the EMI amount is kept identical.
When you partially prepay the loan during the loan tenure and choose not to change your future EMIs, the initial loan duration would scale back, i.e. you repay your loan sooner. However, if you choose to scale back your future EMIs since you partially prepay, your loan duration remains unchanged.
If you skip EMI, say thanks to insufficient balance, assuming EMIs remaining identical, the loan duration would increase. Remember, skipping EMIs doesn’t reflect well on your credit score. Hence, ensure you borrow wisely, within your means, within the interest of your financial wellbeing.