What is an EMI?
EMI (Equated Monthly Installment) is the fixed monthly amount paid towards loan repayment, consisting of principal and interest. Indian banks calculate EMI using the reducing balance method, where interest is charged only on the outstanding principal.
How This EMI Calculator Helps
This calculator helps you budget better, compare loan offers, and reduce total interest through informed planning. Most borrowers underestimate how much interest accumulates over long tenures until they see the amortization table.
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Factors That Affect Your EMI
- Loan Principal: The total amount you borrow. Higher principal means higher EMI.
- Interest Rate: A lower Personal Loan Interest Rate or Home Loan rate reduces your monthly burden significantly.
- Tenure: Choosing a longer tenure reduces your monthly EMI but increases the total interest payout over time.
EMI Calculation Formula
The formula used to calculate the Equated Monthly Installment (EMI) is:
- E = EMI Amount
- P = Principal Loan Amount
- r = Monthly Interest Rate (Annual Rate ÷ 12 ÷ 100)
- n = Loan Tenure in Months
This EMI calculator is maintained by Fincado, a financial tools platform focused on accuracy and transparency for Indian borrowers.
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When Should You Use an EMI Calculator?
- Before applying for any loan to check affordability.
- While comparing banks to find the cheapest option.
- To calculate how much interest you save with prepayments.