Loan EMI Calculator
Amortization Schedule:
| Month | Principal | Interest | Total Payment | Balance |
|---|
Home loan EMI or equated monthly installment is the amount that you pay every month to your lender to repay your home loan. It consists of two components: the principal amount and the interest amount. Knowing your home loan EMI can help you plan your finances better and avoid defaulting on your loan.
In this article, we will explain how to calculate home loan EMI using a simple formula and an online calculator. We will also show you an example of how to use an EMI table to compare different loan options.
Loan EMI Formula
The basic formula for calculating home loan EMI is:
EMI = [P x R x (1+R)^N] / [(1+R)^N-1]
where,
- EMI is the equated monthly installment
- P is the principal or the loan amount
- R is the monthly interest rate (annual interest rate divided by 12)
- N is the loan tenure in months
Using this formula, you can easily calculate the monthly installment of your home loan. However, manual calculations can be prone to errors and time-consuming. Therefore, it is advisable to use an online EMI calculator that can do the calculations for you in seconds.
Home Loan EMI Calculator
An online home loan EMI calculator is a handy tool that can help you calculate your home loan EMI with ease. All you need to do is enter the loan amount, interest rate, and tenure of your home loan and click on calculate. The calculator will display your EMI amount along with other details such as total interest payable, total amount payable, and amortization schedule.
An amortization schedule is a table that shows how your loan balance reduces over time with each EMI payment. It also shows how much of each EMI goes towards principal repayment and interest payment. You can use this table to track your loan progress and plan your prepayments.
You can also use an online EMI calculator to compare different home loan options based on their interest rates, tenures, and EMIs. This can help you choose the best home loan that suits your budget and needs.
Loan EMI Example
Let us take an example of how to calculate home loan EMI using the formula and the calculator.
Suppose you want to buy a house worth Rs. 50 lakhs and you have a down payment of Rs. 10 lakhs. You need to borrow Rs. 40 lakhs as a home loan from a bank that offers you an interest rate of 8% per annum for a tenure of 20 years.
Using the formula,
EMI = [P x R x (1+R)^N] / [(1+R)^N-1]
EMI = [40,00,000 x 0.00667 x (1+0.00667)^240] / [(1+0.00667)^240-1]
EMI = Rs. 33,715
As you can see, the calculator shows the same EMI amount as the formula along with other details such as total interest payable (Rs. 40,91,622), total amount payable (Rs. 80,91,622), and amortization schedule.
The amortization schedule shows how your loan balance reduces over time with each EMI payment. For example,
| Month | Opening Balance | Principal | Interest | Total Payment | Closing Balance |
|---|---|---|---|---|---|
| 1 | 40,00,000 | 6,715 | 27,000 | 33,715 | 39,93,285 |
| 2 | 39,93,285 | 6,759 | 26,956 | 33,715 | 39,86,526 |
| … | … | … | … | … | … |
| 240 | 33,715 | 33,715 | 0 | 33,715 | 0 |
You can use this table to see how much of each EMI goes towards principal repayment and interest payment. You can also use this table to plan your prepayments and save on interest
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