EMI Calculator

Enter the total amount you want to borrow as the loan
Enter the annual rate of interest for your loan
10 years
1 year 50 years
Select the loan repayment duration in years.

Monthly Emi

2,076

The fixed monthly payment to repay your loan

Principle Amount

1,00,000

Total Interest

24,550

Total Amount

1,24,550

Reset

What is EMI?

EMI, or Equated Monthly Installment, is a fixed monthly payment made by a borrower to a lender until the loan is paid off. EMI consists of both principal and interest, with the proportion of interest being higher in the early stages of the loan.

How to Calculate EMI?

The formula for calculating EMI is:
EMI = [P × r × (1 + r)^n] / [(1 + r)^n - 1]
Where:

  • P is the loan amount (e.g., ₹1,00,000).
  • r is the monthly interest rate (annual rate divided by 12 and in decimal form, e.g., 12% annual interest becomes 0.01 per month).
  • n is the loan tenure in months (e.g., 36 months for a 3-year loan).
For example, if you take a loan of ₹1,00,000 at an annual interest rate of 12% for 36 months, your EMI is calculated as:
EMI = [1,00,000 × 0.01 × (1 + 0.01)^36] / [(1 + 0.01)^36 - 1] = ₹3,297.98
This means you will pay ₹3,297.98 every month for the next 36 months to repay the loan.

Benefits of Using EMI

EMI allows borrowers to repay loans in manageable installments, making it easier to plan finances without a sudden burden. The EMI structure is designed to be simple, ensuring borrowers can afford the loan without straining their cash flow. EMI schemes are commonly used for personal loans, car loans, and home loans.

Factors Affecting EMI

Several factors influence the EMI amount, including:

  • Loan Amount: The higher the loan amount, the higher the EMI.
  • Interest Rate: A higher interest rate will result in a higher EMI.
  • Loan Tenure: A longer tenure reduces the EMI amount but increases the total interest paid.
By adjusting these parameters, you can find an EMI amount that fits your budget and financial goals.

EMI vs. Other Loan Repayment Options

EMI offers a predictable and structured way to repay loans, unlike lump sum payments which can be harder to manage. It's different from bullet repayments where the principal is paid at the end of the term, leaving you to pay only interest periodically. EMI helps you balance your finances by ensuring fixed payments each month.

Real-Life Example of EMI Usage

Let’s say you take a ₹2,00,000 home loan for 5 years at an annual interest rate of 10%. Using the EMI formula, your monthly EMI will be ₹4,249.29. Over 5 years, you will pay a total of ₹2,54,955.40, with ₹54,955.40 as the interest paid to the lender.

How EMI Affects Your Loan Repayment

EMI payments help you systematically pay off your loan, but it’s important to understand that the interest component of EMI is higher in the initial months. As you continue making payments, the principal portion of the EMI increases, and the interest decreases. This process is known as amortization.

How to Use the KlasterMe EMI Calculator

Using the KlasterMe EMI Calculator is easy and gives you real-time results. Follow these steps:

  • Enter the Loan Amount: In the input box labeled Loan Amount, enter the total amount of your loan (e.g., ₹1,00,000).
  • Enter the Interest Rate: In the Interest Rate input box, provide the annual interest rate (e.g., 12%).
  • Select the Loan Tenure: Use the slider or input box to choose the loan duration in months (e.g., 36 months).
  • View the Results: The EMI value will be calculated and displayed in real time. It represents the monthly payment you will need to make towards repaying your loan.

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