Loan Calculator Payment with Interest

EMI Formula:

\[ EMI = \frac{P \times R \times (1+R)^N}{(1+R)^N - 1} \]

Monthly Payment (EMI):

Total Payment:

Total Interest:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is EMI?

EMI (Equated Monthly Installment) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. It's used to pay off both interest and principal each month so that over time, the loan is paid off in full.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

\[ EMI = \frac{P \times R \times (1+R)^N}{(1+R)^N - 1} \]

Where:

\( P \) — Principal loan amount
\( R \) — Monthly interest rate (annual rate divided by 12, in decimal)
\( N \) — Loan tenure in months
\( EMI \) — Equated monthly installment

Explanation: The formula calculates the fixed payment amount that includes both principal and interest components, ensuring the loan is paid off in full over the specified tenure.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, budgeting, and comparing different loan options. It allows borrowers to assess affordability before committing to a loan.

4. Using the Calculator

Tips: Enter the principal amount, annual interest rate, and loan tenure in months. All values must be positive numbers. The calculator will show your monthly EMI, total payment over the loan term, and total interest paid.

5. Frequently Asked Questions (FAQ)

Q1: How does interest rate affect EMI?
A: Higher interest rates increase both your EMI and total interest paid. Even a small rate difference can significantly impact your total repayment amount over time.

Q2: What happens if I choose a longer tenure?
A: Longer tenures reduce your EMI but increase total interest paid. Shorter tenures mean higher EMIs but less total interest.

Q3: Can I prepay my loan to reduce interest?
A: Yes, prepayments reduce your principal amount, which can lower total interest. Check your loan terms for prepayment penalties.

Q4: Are there different types of EMI calculations?
A: Most loans use reducing balance method (shown here). Flat interest rate loans calculate interest on full principal for entire tenure.

Q5: What's included in my EMI payment?
A: Each EMI includes both principal repayment and interest. Early payments are mostly interest; later payments apply more to principal.