When you borrow money/finance from a bank or a financial institution, that amount is called a loan. The bank pays off the entire amount on your behalf for a house, car, education practically anything. You, on the other hand, will pay a specific amount to the bank every month until the loan amount is fully paid off. This amount payable to the bank is called the Equated Monthly Instalment or the EMI. It consists of the principal amount to be repaid and interest on the loan. The Loan EMI calculator helps you to determine your monthly EMI keeping in mind all the factors that are in play.

Though the monthly EMI doesn’t change, the proportion of the principal and interest change with time. With each successive EMI, you will pay more towards the principal amount and less in terms of interest. There is a formula to calculate EMI, wherein the sum of principal amount and interest is divided by the tenure, i.e., number of months, in which the loan has to be repaid. This amount has to be paid monthly. The interest component of the EMI would be larger during the initial months and gradually reduce with each payment. The percentage towards the principal depends on the rate of interest.

**The formula to calculate the EMI:**

**Where:**

**E –** is EMI

**P –** is Principal Loan Amount

**r –** is the rate of interest calculated on monthly basis. (i.e., r = Rate of Annual interest/12/100. If rate of interest is 10.5% per annum, then r = 10.5/12/100=0.00875)

**n –** is loan term / tenure / duration in number of months

However, this formula can be a tedious way to calculate your EMI. An EMI calculator is the easiest way to calculate your monthly payment. There are many EMI calculators available online too. Go to any bank’s website or any financial institutions website, the colorful charts and the instant results make the Loan EMI calculator very intuitive and quick. All you have to do is to enter the information in the EMI calculator. The information required in the various fields needs to be filled accordingly.

-The principal loan amount you wish to avail (rupees)

-Loan term (months or years)

-The rate of interest (percentage)

-EMI in advance OR EMI in arrears (for car loan only)

You can use a slider to adjust the values in the Loan EMI calculator. As soon as the values are changed using the slider (or hit the ‘tab’ key after entering the values directly in the input fields), Loan EMI calculator will re-calculate your monthly payment (EMI) amount.

An **EMI calculator** helps you to plan all your financial demands judiciously. A well planned and methodical expenditure calculator of your earnings and spending’s will help you to plan your financial future better.