EMI
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Principal Amount
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What Is an EMI?
An EMI, or Equated Monthly Installment, is the fixed amount you pay each month towards repaying a loan. Whether you've taken out a loan for a home, car, or personal reasons, the EMI includes both the principal amount and the interest. This way, you gradually pay off your debt over a specific period.
Understanding your EMI helps you plan your finances better, ensuring that your monthly budget can accommodate this regular payment without straining your resources. By using an EMI calculator, you can easily estimate how much you'll need to pay each month, making it easier to decide on the right loan amount and repayment term that fits your financial situation.
What Is an EMI Calculator?
An EMI calculator helps you calculate EMI amount for any loan, such as a home loan, car loan, personal loan, education loan, etc. online for free. It takes the entered values and computes the EMI amount in seconds. The online EMI calculator can also show you a break-up of total payment into principal and interest components. It also helps you compare different loan options and plan your monthly budget accordingly.
How Does an EMI Calculator Work?
The online EMI calculator is simple to use. It just considers the basic details of a loan and provides the EMI amount. It considers the loan amount, rate of interest and duration of the loan. Once these details are entered into the calculator, it displays the EMI of the loan along with a detailed breakdown of the principal amount, interest amount and total payable on the loan.
EMI Calculator Formula
Here's the formula to calculate EMI:
E = [P x R x (1+R) ^N] / [(1+R) ^ (N-1)]
Where,
- E = EMI
- P = Principal Amount
- R = Rate of interest. This is calculated on a monthly basis. If the interest rate is 4% per annum then R will be 4/12/100 = 0.0033.
- N = Duration in months
How To Use Angel One Loan EMI Calculator?
The usage of Angel One’s EMI calculator is easy and effortless. Open the EMI Calculator online on Angel One and follow the steps given below:
- Enter the loan amount
- Enter the interest rate
- Enter the duration of the loan
That’s it, and we are done. The online EMI calculator by Angel One will give quick results of the EMI amount along with a breakdown of the total payable amount, interest amount and principal amount of the loan.
Here’s another example to help you understand how to use the EMI Calculator Online on Angel One.
Assume you are planning to get a loan of ₹1,20,000 for a wedding expense. The interest rate on the loan is 7% and the duration is of 3 years. Just enter these values into the calculator. The loan calculator displays the results as follows:
- EMI = ₹3.705/month
- Principal amount = ₹1,20,000
- Interest = ₹13,389
- Total Payable = ₹1,33,389
Here’s an amortisation schedule for our above example to show how it works.
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So you’ll have to pay an EMI of ₹3.705 every month for 3 years. If you think this will exceed your budget, then you can find a loan with a lower interest rate or increase the tenure of the loan. If the EMI amount is less than the budget, you can reduce the duration of the loan. This way, you can set different scenarios and use the loan calculator to help you out with the calculations in seconds.
Advantages of Using Angel One EMI Calculator
The online loan EMI calculator on Angel One offers a range of benefits that can simplify your financial planning. Here’s how:
- Saves time: Instead of spending hours on manual calculations or navigating complex spreadsheets. The online loan EMI calculator delivers quick results with just a few inputs, helping you determine your monthly loan payments in no time. It’s a huge time-saver, allowing you to focus on what really matters.
- Easy to use: The calculator features a user-friendly design, making it simple to calculate EMIs for various types of loans, whether it's for a home, a car, or personal needs. Its straightforward interface ensures that even if you're not a finance expert, you can easily find out your monthly payment.
- Accurate calculations: With this tool, you can get precise estimates for your EMIs based on factors like the loan amount, interest rate, and duration. This accuracy helps you plan your finances more effectively and make well-informed decisions. No more guesswork—just clear, reliable figures.
- Helps in financial planning: The calculator doesn’t just give you a number; it allows you to tweak the loan amount, interest rate, and tenure to see how different scenarios would affect your EMI. This flexibility helps you find an EMI that fits comfortably within your budget and aligns with your financial goals. It’s a great tool for assessing what you can afford and choosing a loan option that matches your repayment capacity.
- Customisable options: One of the features of the EMI calculator online is the ability to play around with different scenarios. By adjusting the loan parameters, you can explore ways to lower your EMI, whether by changing the loan amount or extending the repayment period. This customisation lets you find the most affordable option for your situation.
- Informed decision-making: The calculator not only shows you the EMI but also breaks down the components, allowing you to see how much of your payment goes towards the principal and how much goes towards interest. This insight helps you make better decisions about your loan repayment strategy. You can assess the impact of different interest rates and tenures on your EMI, giving you a clearer picture of what you’re signing up for.
- Always accessible: The EMI calculator is available online, so you can use it whenever and wherever you need it. Whether you’re at home, at work, or on the go, you can quickly calculate your EMIs without having to visit a bank or deal with the hassle of manual calculations.
- Instant comparisons: The EMI calculator allows you to compare different loan options side by side. By adjusting the loan amount, interest rate, and tenure, you can instantly see how each option impacts your monthly payments. This feature helps you make quick and informed decisions about which loan suits your needs best.
Types of EMI Calculators
There are various types of Loan EMI Calculators that can help you with your EMI calculation easily.
- Personal loan EMI calculator: If you are considering getting a personal loan, the personal loan EMI calculator or EMI calculator can be your guiding tool. It helps you estimate your monthly instalments accurately, enabling you to plan your budget effectively. By inputting the loan amount, interest rate, and tenure, you'll receive a clear breakdown of your EMI amount.
- Home loan EMI calculator: If you are planning to buy your dream home, the home loan EMI calculator ensures you're well-prepared. Just enter the loan amount, interest rate, and tenure, and you'll instantly see your monthly EMI and the overall interest amount. The online loan EMI calculator assists you in making informed decisions about your home purchase.
- Car loan EMI calculator: Using the car loan EMI calculator you can estimate your monthly expenses. This enables you to choose a car loan that suits your financial capacity, ensuring that you can enjoy your new vehicle without stress.
- Education Loan EMI calculator: The education loan EMI calculator ensures that you're well-prepared for the financial aspects of pursuing higher education. The education loan EMI calculator lets you plan your monthly repayments, allowing you to focus on your studies without financial worries.
- Loan against Property EMI calculator: On using the loan against property EMI calculator, you can check how much EMI you have to pay if you get a loan against the property. By knowing the exact monthly repayment, you can use your property's value to meet your financial needs while maintaining stability.
Factors Affecting Your EMI Amount
- Interest rate: The primary factor that affects the EMI amount is the interest rate. A higher interest rate increases your EMI, as you pay more interest along with the principal.
- Loan tenure: Longer tenures also impact the EMI. Shorter tenures will result in higher EMIs and on the other hand, longer tenures result in low EMIs but the interest amount will be high.
- Type of interest: Fixed or floating interest rates can impact your EMI. Floating rates may change during the tenure, affecting your monthly payments.
- Credit score: A better credit score can result in lower interest rates, affecting your EMI amount.
EMI Calculator FAQs
How can I reduce my EMI amount?
You can reduce your EMI amount by:
- Choosing a longer loan tenure: This will reduce your monthly instalment but increase your total interest payable.
- Choosing a lower interest rate: This will reduce both your monthly instalment and your total interest payable. You can negotiate with your lender or switch to another lender who offers a lower interest rate.
- Making a higher down payment: This will reduce your principal amount and hence your monthly instalment and total interest payable.
What are the factor that affects individuals EMI eligibility?
EMI eligibility depends on various factors, such as:
- Income: income determines your repayment capacity and hence your maximum EMI amount. Generally, lenders prefer that your EMI does not exceed 40% to 50% of your monthly income.
- Credit score: Credit score reflects your credit history and repayment behaviour. A higher credit score indicates a lower risk of default and hence increases your chances of getting a loan at a lower interest rate and higher EMI amount.
- Existing debts: Your existing debts affect your debt-to-income ratio, which is the percentage of your income that goes towards paying off your debts. A lower debt-to-income ratio indicates a higher surplus income and hence increases your EMI eligibility.
What types of loans can be calculated using an EMI calculator?
EMI calculator can be used for calculating the EMI payments of various loans such as
- Personal Loan
- Car Loan
- Home Loan
What happens if I miss an EMI payment?
If you miss an EMI payment, the lender may charge a late payment fee and penal interest on the outstanding amount.
What are the benefits of an EMI calculator?
An EMI calculator offers quick and accurate estimates of your monthly payments, helping you plan your finances effectively. It saves time, provides flexibility to adjust loan parameters, and eliminates the need for manual calculations, ensuring you make informed decisions before committing to a loan.
Will the bank's EMI calculation differ from the EMI calculator?
An EMI calculator offers quick and accurate estimates of your monthly payments, helping you plan your finances effectively. It saves time, provides flexibility to adjust loan parameters, and eliminates the need for manual calculations, ensuring you make informed decisions before committing to a loan.
