EMI, which stands for Equated Monthly Installments is a fixed amount which you pay against your loan every month to the lender you have borrowed from. Your EMI consists of the principal and interest portion of the loan you have taken. You repay your loan every month for a period of time until it is fully closed. The most common types of loan such as personal loan, home loan, car loan, all are repaid in EMIs.
EMI has three basic parameters associated with it. They are Loan amount, tenure and interest. EMI Amount will differ based on these parameters. The mathematical formula to calculate loan EMI is as follows: E = A . r(1+r)n / ((1+r)n – 1).
In the above equation, A = Amount borrowed
E = EMI or Monthly payment
r = interest rate calculated in months (Eg. if Annual Interest is 12%, then r is 12%/12/100)
n = total number of months.
To simplify your loan EMI calculation, we have made this easy to use loan calculator. Enter your correct loan details to find out your loan EMI and interest amount.