Introduction
Looking to make a big-ticket purchase such as a new Home? Want to raise funds for your new business? Well, you might consider availing a loan to support your needs. And if you are looking for a loan, it might be a good idea to calculate your EMIs before you embark on this journey. If you want to estimate your monthly EMIs, you can calculate so yourself by using the online Loan EMI Calculator tools available on our website. Such tools allow prospective borrowers to quickly and accurately determine their monthly loan repayments based on factors such as loan amount, interest rate, and loan tenor. By utilising this calculator, individuals can make informed decisions about their loan repayments and manage their finances efficiently.
Factors Affecting Your Loan Amount
Several factors can impact the repayment amount, and these factors may vary based on the type of debt and the agreement terms. Common factors that can affect the loan amount include the following.
- The interest rate charged on the outstanding balance is one of the most significant factors that can impact the amount you have to repay. The interest rate is a percentage of the outstanding balance that the creditor charges on the borrowed funds. A higher interest rate means that you will pay more in interest charges, resulting in a higher total interest outgo..
- When payments are not made on time, creditors may charge late fees. Late fees are additional charges added to the outstanding balance as a penalty for missing the payment deadline. Thus, it is advisable to always make your loan repayments on time.
- The principal amount is the original amount borrowed from the creditor, and it is the foundation for calculating the repayment amount. The principal amount depends on your loan eligibility such as your credit score and income among other factors.
How Can an Online EMI Calculator Help You?
An online EMI calculator is a user-friendly and effective financial tool that can help you understand the details of your loans such as monthly repayment amounts. This can allow you to manage your finances better. This calculator simplifies the process of calculating the EMI amount, which is the monthly payment you need to pay to repay your loan.
The calculator uses inputs such as the loan amount, interest rate, and loan tenor to calculate the EMI amount. The loan amount is the total amount that an individual borrows, and the interest rate is the percentage that the lender charges on the loan amount.
An online EMI calculator is a helpful financial tool that offers several benefits to individuals seeking loans. Below are some ways in which an online EMI calculator can assist you:
- By entering different loan amounts, interest rates, and loan tenors into the calculator, you can view the corresponding EMI amounts and determine what suits you the most. This information can help in planning the loan repayments effectively.
- An online EMI calculator also lets you compare different loan options. By comparing the EMI amounts of different loans, you can choose the most beneficial offer.
- With an online EMI calculator, you can calculate your loan EMI quickly and accurately, without the need for manual calculations.
- The calculator is available online, and you can access it from anywhere and at any time, making it convenient and hassle-free to use.
The Formula to Determine Loan EMI Amount
If you want to determine the monthly EMI amount for a loan, an EMI calculator or loan EMI calculator can help. The formula for manual calculation is as follows:
EMI = [P x R x (1+R) ^N]/[(1+R) ^N-1]
Here,
- P stands for the principal loan amount
- R represents the rate of interest per month (calculated by dividing the annual rate by 12)
- N is the loan tenor in months.
Using an EMI calculator, you can enter the loan amount, interest rate, and loan tenor to get an instant estimate of your EMI amount. This tool can help you plan your finances effectively and make informed decisions about your loan repayments. By comparing different loan options using the calculator, you can choose the one that suits your financial situation best.
Types of EMI Calculators Available Online
If you don’t want to invest your time in finding EMIs manually by using the tedious and complex EMI calculator formula, you can easily find a Loan EMI calculator on our website. Below are the two types of EMI calculators:
Home Loan EMI Calculator
Home Loan EMI calculator is designed specifically for calculating the EMI amounts for Home Loans. It takes into account factors such as the loan amount, interest rate and loan tenor to help you plan your repayment journey.
Loan Against Property EMI Calculator
Loan Against Property EMI Calculator helps calculate the monthly EMIs for loans taken against a property by entering only three inputs. This can help you plan your loan repayment more effectively.
How to Use an EMI Calculator?
Using an EMI calculator is a straightforward process that can help you plan your finances better and make informed decisions about your loans. Here are the simple steps to use an EMI calculator:
- Choose the calculator that is relevant to your loan.
- Input the loan details such as the loan amount, interest rate, and loan tenor.
- Once you have entered the loan details, the calculator with provide the monthly EMI amount, total principal and interest amount, and even a loan amortization schedule.
Effect of Loan Prepayment on Your EMI
- Prepayment of a loan involves paying off a portion or the entire outstanding loan amount before the end of the loan tenor, which can have a significant impact on your EMI. By using a loan EMI calculator, you can better understand the effects of loan prepayment on your monthly payments. Here are some of the ways that prepayment can affect your EMI:
- Prepayment reduces the outstanding principal amount of the loan, which can change the loan tenor
- Since the EMI is made up of both principal and interest components, reducing the principal amount will also reduce the interest component of your EMI.
Frequently Asked Questions
If you have a consistent source of income and opt for a loan with favorable interest rates and terms, EMI can be a viable option. However, it's important to evaluate your financial situation and objectives before committing to a loan with EMI payments.
EMI = (P x R x (1+R) ^N) / ((1+R) ^N - 1)
Where:
P = Principal amount (the loan amount borrowed)
R = Interest rate per month (annual rate/12)
N = Loan tenor in months
To calculate the EMI per lakh, you can use the following formula:
EMI per Lakh = (Loan Amount x Interest Rate / 12) x [(1+ Interest Rate / 12) ^ Loan Tenor in Months] / [(1+ Interest Rate / 12) ^ Loan Tenor in Months -1]
For example, here's how you can calculate the EMI per lakh for a loan amount of Rs. 20 lakhs at an interest rate of 10% for a loan tenor of 5 years (60 months):
First calculate the monthly interest rate. This can be done by dividing the annual interest rate by 12.
Monthly interest rate = 10% / 12 = 0.0083333
Secondly, calculate the EMI:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where P is the loan amount, R is the monthly interest rate, and N is the loan tenor in months.
EMI = [20,00,000 x 0.0083333 x (1+0.0083333) ^60]/[(1+0.0083333) ^60-1]
EMI = 44,986.55
Lastly to calculate the EMI per lakh, we can simply divide the EMI by 20 (as the loan amount is 20 lakhs):
EMI per lakh = 44,986.55 / 20 = 2,249.33
No, the EMI (Equated Monthly Installment) amount remains the same throughout the loan repayment period, until you have requested for a change in the monthly repayment amount, and it has been approved basis your eligibility.
Yes, you can reduce your EMI period by opting for a higher EMI amount or making prepayments on your loan.
You are not allowed to pause EMI payments unless there are certain situations, or the loan agreement specifies it. However, in certain circumstances, such as a medical emergency, job loss, or natural disaster, you may get offered a moratorium period. During this time, borrowers can temporarily suspend their EMI payments.
