EMI Calculator for Loan in India

The EMI calculator in India is your loan buddy! It’s a free online tool that figures out your monthly loan payments. Just tell it how much you need (loan amount), the interest rate, and how long you’ll take to repay (loan term). It then gives you your EMI, the fixed monthly payment. This way, you can see what you can afford to borrow before you take out a loan.

Did You Know?: Personal loans in India grew quickly, going from Rs 4.26 lakh crore in 2017 to Rs 13.32 lakh crore in 2023! 1Unsecured personal loans jumped 4-fold Website: Economic Times Category: News

Loans in India are on the rise! Tools like Loan EMI calculators can help you borrow wisely and avoid debt traps.

Loan Calculator

How EMI calculator help me before taking a loan

Top Benefits:

  1. Plan Your Money: An Loan Repayment Calculator shows you exactly how much you’ll pay each month. This helps you see if the loan payment fits your budget comfortably.
  2. Comparison: You can compare different loans by plugging in different loan amounts, interest rates, and loan terms. This helps you find the best deal.
  3. Budgeting: Knowing your EMI amount in advance lets you plan your budget around the monthly payment. This ensures you have enough money to cover everything without straining your finances.
  4. See the True Cost: The calculator shows you the total interest you’ll pay over the loan’s life. This helps you understand the full cost of borrowing the money.
  5. Fast and Easy: The calculator gives you a quick estimate of your repayment plan. This lets you see if the loan makes sense for your goals and situation.

Few Drawbacks:

  1. Estimates Only: The calculator gives you an idea of what you’ll pay, but it might not be exact. There could be other fees, and interest rates can change slightly.
  2. Complex Loans: The Monthly Payment Calculator might not work perfectly for loans with unique structures or changing interest rates.

Even with these limitations, an Amortization Calculator is a great tool to help you understand loan costs and make smart financial decisions.

How Does EMI Calculator Work?

Think of it as a financial calculator specifically designed for loans. It uses a mathematical formula to determine your Equated Monthly Installment (EMI), which is the fixed amount you’ll pay towards the loan each month. The calculator typically requires three key inputs:

  1. Loan Amount: This is the total sum of money you’re borrowing.
  2. Interest Rate: This is the cost of borrowing the money, expressed as a percentage of the loan amount. It’s essentially the fee you pay the lender for using their money.
  3. Loan Tenure: This refers to the total duration of the loan, typically expressed in months or years.

Once you feed these details into the calculator, it performs some magic behind the scenes (using the EMI formula) and delivers your personalized EMI amount. This is the essential monthly payment you’ll need to make throughout the loan tenure to settle the borrowed amount along with the interest.

What is The Formula to Calculate Monthly EMI?

Ever wondered how Installment Budget Calculators figure out your monthly payment? They use a special formula that considers the amount you borrow (principal), the interest rate, and how long you’ll take to repay (loan term). This magic formula helps you understand what your monthly payment (EMI) will be.

The EMI formula looks a bit complex, but it’s like a recipe for calculating your monthly payment:

Formula: EMI = [P x R x (1+R)^N] / [(1+R)^N – 1]

  • P: This is the principal amount of the loan.
  • R: This is the monthly interest rate
  • N: This is the loan tenure in months.

Let’s break it down with an example:

Raju Needs a New Phone:

Raju wants a new phone but needs Rs. 20,000 to afford it. He decides to take out a loan for 1 year (12 months) with an interest rate of 12% per year (which is a monthly interest rate of 0.01).

Plugging in the Numbers:

  • EMI = [20000 x 0.01 x (1.01)^12] / [(1.01)^12 – 1]

Getting the Answer (Approximately):

  • After some calculations (you can use a calculator!),
  • we find Raju’s EMI is approximately Rs. 1774.19 per month.

How to Calculate EMI by Monthly Payment Calculator

  1. Find a Calculator: Many websites offer free EMI calculators. Let’s say you choose Pricemint.
  2. Loan Amount: Enter the amount you want to borrow (e.g., Rs. 20,000 for a new phone).
  3. Interest Rate: Enter the interest rate offered by the lender (as a percentage).
  4. Loan Tenure: Enter the loan repayment period in years (e.g., 1 year for your phone).
  5. Calculate!: Click the “Calculate” button.
  6. See the Results: The calculator will show your EMI amount, the total interest you’ll pay, and the total amount you’ll repay over the loan term.
  7. Amortization Schedule (Optional): Some calculators offer an amortization schedule.
  8. This shows a breakdown of each EMI, including how much goes towards the principal (the amount you borrowed) and the interest.
  9. It also shows the remaining loan balance each month.

Different Types of EMI Calculators in India

  1. Personal Loan Calculator: Estimate monthly payments for unsecured loans you use for personal needs.
  2. Home Loan Calculator: Plan your monthly repayments for your dream home.
  3. Car Loan Calculator: See how much your new car will cost you each month.
  4. Education Loan Calculator: Plan for your education or your child’s education.
  5. Business Loan Calculator: Manage your business loan repayments effectively.
  6. Gold Loan Calculator: Get quick cash using your gold jewellery and understand the repayments.
  7. Home Renovation Loan Calculator: Spruce up your home and understand the EMIs involved.
  8. Agriculture Loan Calculator: Grow your farm and manage your loan repayments effectively.

Alternatives to EMI calculators

1. MS Excel

How to Calculate EMI in Excel –

  1. Open Excel: Launch Excel on your device.
  2. Enter Loan Details::
    • Loan Amount (Principal)
    • Annual Interest Rate
    • Loan Tenure in Months
  3. Calculate Monthly Interest Rate: Divide the annual interest rate by 12 to get the monthly rate.
  4. Use PMT Function: In a cell, enter the PMT formula: =PMT(monthly interest rate, loan tenure in months, -loan amount)
  5. Press Enter: Excel will calculate the EMI.

2. Advanced Mobile Apps

The digital age has brought forth a plethora of mobile applications designed for financial management. Many of these apps offer built-in EMI calculators along with additional functionalities.

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