How to Use the EMI Calculator

EMI calculator is one of the easiest calculator available online, you can calculate your EMI for personal loans, car loans or any other loan EMI using our online Calculator. This calculator is very user-friendly, responsive, fast and easy to provide the result.

To use our calculator you need to input

  • LOAN AMOUNT – This is the total loan amount you wish to take the loan.
  • RATE OF INTEREST – This the interest rate at which the bank is providing the loan, it is the rate per year. For eg. If the rate of interest is 11.5% enter 11.5 in the field.
  • Loan Period –  This is the term or the period for which you wish to take the loan for. Please enter the value in the number of months. For eg. If you wish to take the loan for 5 years then enter 5 x 12 = 60months in the field.
  • Your EMI to pay –  This is your final email calculated as per the details you have provided above. This calculated amount you have to pay every month until the wished loan period.

How EMI Is Calculated:

EMI which is short for Equated Monthly Instalments is the sum of interest rate on the loan and the part payment of the principal amount. This amount will be calculated until the loan is repaid to the bank or the loan provider.

The interest rate could be of simple interest or compound interest, in simple interest method of calculation the interest rate will be calculated on the remaining balance or remaining principal amount paid each month. Thus the interest paid towards the loan, in the beginning, is higher than the end of the loan period. Whereas in the compound interest the interest paid towards the loan is fixed throughout the tenor of the loan.

The benefit of Simple interest rate calculation is that you will be paying your loan faster than the other method.

The formula used in the calculation of the EMI is PMT

PMT is a mathematical function which is used to calculate the payments provided the interest rate and the period i.e.,

            PMT(r,N,P)

Where r is the rate of interest on the loan

            N  is the number of months you wish to take the loan

            P  is the Principle amount you wish to take as a loan amount.

This is the formula we used which gives you the EMI to be paid every month.

You might also like our other handy word count tool

Type of Interest Rates:

When you are planning to take a loan please take into the consideration of the type of interest rate available in the market or the bank it provides. In general, the type of interest rate are

  •             Floating Interest Rate
  •             Fixed Interest Rate

In Floating interest rate or the variable interest rate, the rate of interest may or may not remain same during the tenure of the loan. This rate will be increased or decreased as per the market fluctuations if the market rate increases the bank or the loan provider will increase the interest rate on the loan. In general, the EMI amount will not change for the user but it might increase or decrease the loan period.

Where as the Fixed Interest rate will remain the same through out the tenure irrespective of the market condition but usually the fixed rate will be higher when compared to the floating rate of interest. Hence before going to take the final decision use of EMI calculator to calculate and decide which interest rate and how much you want to take the loan.