Advanced EMI Calculator

Estimate your monthly loan payments with our free, instant calculator. See a full breakdown including interest, principal, and a complete amortization schedule.

Understanding Your EMI

An Equated Monthly Installment (EMI) is the fixed amount you pay to the lender every month to repay your loan. It includes both the principal amount and the interest charged on the loan. Our calculator helps you understand this breakdown clearly, empowering you to make informed financial decisions.

The EMI Calculation Formula

The mathematical formula used to calculate EMI is:

EMI = P × r × (1 + r)ⁿ / ((1 + r)ⁿ - 1)
  • P = Principal loan amount
  • r = Monthly rate of interest (annual rate / 12 / 100)
  • n = Loan tenure in months

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Frequently Asked Questions

What is an EMI?

EMI stands for Equated Monthly Installment. It is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. EMIs are used to pay off both interest and principal each month so that over a specified number of years, the loan is paid off in full.

How is EMI calculated?

EMI is calculated using the formula: EMI = P × r × (1 + r)^n / ((1 + r)^n - 1), where P is the principal loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the number of monthly installments (loan tenure in months).

What are the components of an EMI?

An EMI consists of two main components: the principal repayment and the interest payment. In the initial months, the interest component is larger, and as the loan matures, the principal component becomes larger.

Does a lower EMI mean a better loan?

Not necessarily. A lower EMI often means a longer loan tenure, which results in paying a significantly higher total interest over the life of the loan. It's important to balance a manageable EMI with the shortest possible loan term.