## What is EMI?

###### Equated Monthly Installment – EMI for short – is the amount payable every month to the bank or any other financial institution until the loan amount is fully paid off. It consists of the interest on loan as well as part of the principal amount to be repaid. The sum of principal amount and interest is divided by the tenure, i.e., number of months, in which the loan has to be repaid. This amount has to be repaid monthly. The interest component of the EMI would be larger in the initial months and gradually reduce when compared to the principal amount. The exact percentage allocated towards payment of the principal depends on the interest rate. Even though your monthly EMI payment won't change, the proportion of principal and interest components will change with time. With each successive payment, you'll pay more towards the principal and less in interest.

###### Here's the formula to calculate EMI:

###### where

**E** is EMI

**P** is Principal Loan Amount

**r** is rate of interest calculated on monthly basis. (i.e., r = Rate of Annual interest/12/100. If rate of interest is 10.5% per annum,
then r = 10.5/12/100=0.00875)

**n** is loan term / tenure / duration in number of months

###### For example, if you borrow
RS. 10,00,000 from the bank at 10.5% annual interest for a period of 10 years (i.e., 120 months), then EMI =
RS. 10,00,000 * 0.00875 * (1 + 0.00875)^{120} / ((1 + 0.00875)^{120} – 1) =
RS. 13,493. i.e., you will have to pay
RS. 13,493 for 120 months to repay the entire loan amount. The total amount payable will be
RS. 13,493 * 120 = RS. 16,19,220 that includes
RS. 6,19,220 as interest toward the loan.

###### Computing EMI for different combinations of principal loan amount, interest rates and loan term using the above EMI formula by hand is time consuming, complex and error prone. Our EMI calculator automates this calculation for you and gives you the result in a split second along with visual charts displaying payment schedule and the break-up of total payment.

## How to use EMI calculator?

###### With colourful charts and instant results, our EMI calculator is easy to use, intuitive to understand and is quick to perform. You can calculate EMI for home loan, car loan, personal loan, education loan or any other fully amortizing loan using this calculator.

###### Enter the following information in the EMI calculator:

- Principal loan amount you wish to avail (rupees)
- Loan term (months or years)
- Rate of interest (percentage)
- EMI in advance OR EMI in arrears (for car loan only)