Loan Calculator

Amortization Schedule

Year	Principal Paid	Interest Paid	Remaining Balance

Understanding Loan Calculation

A loan EMI consists of two parts: Principal and Interest. The EMI remains constant throughout the loan tenure, but the proportion of principal and interest changes.

EMI Formula

EMI = P × r × (1 + r)^n / ((1 + r)^n - 1)

where:

P = Principal loan amount
r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
n = Total number of months (years × 12)

Key Points

Higher interest rate means higher EMI
Longer tenure reduces EMI but increases total interest
Initial EMIs have higher interest component
Later EMIs have higher principal component
Part prepayment can reduce total interest burden
EMI should not exceed 40-50% of monthly income

Example

Suppose you want to take a loan of ₹1,00,000 for 20 years at an interest rate of 12% per annum. The EMI would be:

EMI = 1,00,000 x 12 x (1 + 12/100)^(20*12) / ((1 + 12/100)^(20*12) - 1)

EMI = ₹9,650

Frequently Asked Questions

What is a loan EMI?

An EMI (Equated Monthly Installment) is a fixed amount of money that is paid back to the lender monthly to repay a loan.

How do I calculate the EMI?

EMI is calculated using the formula: EMI = P x r x (1 + r)^n / ((1 + r)^n - 1), where P is the loan amount, r is the monthly interest rate, and n is the number of months.

What is the difference between EMI and interest?

EMI is the amount that is paid back to the lender monthly, while interest is the additional amount that is added to the principal amount each month.

What is the difference between EMI and principal?

Principal is the amount that is borrowed, while EMI is the amount that is paid back to the lender monthly.

What is the difference between EMI and loan term?

Loan term is the number of months that the loan is borrowed for, while EMI is the amount that is paid back to the lender monthly.

Monthly EMI