EMI Calculator: Everything you Need to Know!

Considering the increasing expenses, and premium lifestyle being adopted by many, borrowing funds using credit cards or personal loans has become more of a necessity than a luxury. On top of the many benefits that these mediums offer, it is not only to get a credit card or borrow a personal loan, but it is equally easier to repay the borrowed amount.

What is an EMI?

Credit card issuers and/or personal loan providers offer the option of repaying the borrowed amount in easy installments. These installments are termed as EMIs, fully formed as Equated Monthly Installment. When a borrower borrows a loan, he/she signs an agreement with the lender which states that a specific amount of money is being lent on certain terms, and will be repaid with interest within a specific time period in the form of monthly installments. These installments are known as EMIs.

In general terms, EMI is the total amount (including principal and interest) which the borrower pays to the lender towards the repayment of loan.

What is an EMI Calculator?

To find out how much would be your monthly installment on a specific amount of loan/credit, you can simply use an EMI calculator.

All you need to do is enter the variables of your loan such as the principal amount, rate of interest, loan duration and you will be able to find out your monthly installment in seconds! Use Paytm's EMI Calculator and calculate your monthly installment amount even before borrowing the loan in a few seconds!

Factors Affecting Your Due Amount

There are few basic factors that affect your due amount. Let's take a look at them-

• The Loan Amount - It is the amount of money that you are borrowing. The loan amount is directly related to the EMI amount; meaning that higher the loan amount, higher will be your EMI amount
• Rate of Interest - It is the amount of interest that you will be paying on your EMI. Lower the EMI amount, lower will be the interest on it
• Loan Tenure - It refers to the time period for which you have borrowed the amount. Longer the loan tenure, lower will be the EMI

How to Use Paytm EMI Calculator Online?

To use the Paytm Personal loan EMI Calculator, all you need to do is enter the variables of your loan such as the principal amount, rate of interest, loan duration and you will be able to find out your monthly installment in seconds! Use Paytm's EMI Calculator and calculate your monthly installment amount even before borrowing the loan in a few seconds!

EMI Calculator Formula to Calculate EMI Interest Rate

To calculate loan EMI, there are basic three factors that are taken into consideration. These factors are:

• Loan amount
• Loan tenure
• Interest rate on loan

The above three factors vary for different loan providers. Each loan transaction would have a different amount, different loan tenure and a different rate of interest. Hence, the EMI for every loan is different. Hence, it is of utmost importance to weigh these basic factors before borrowing a loan and to make decisions accordingly.

Loan EMI can be calculated in the following using the following formula:

EMI=[P x R x (1+R)^N]/[(1+R)^ (N-1)]

Where,
EMI stands for Equated Monthly Installment
P refers to the principal amount, or the actual amount borrowed
R refers to the rate of interest on the loan amount (to be calculated monthly)
N stands for the loan duration; meaning the time period in which the loan amount must be repaid (to be used in terms of months)

Let's take an example to understand this better:

Suppose, you take a personal loan of Rs. 10 lakh for 2 years at a rate of interest of 20% p.a.

Now, since the rate of interest and loan duration given above are in different units, we need to first convert these into months.
Loan duration in months - 12*2=24 months
Monthly Rate of interest - 20/12=1.66% p.m.

Now, using the above formula-

EMI=[P x R x (1+R)^N]/[(1+R)^ (N-1)]
EMI=[10 x 1.66 x (1+1.66)^24]/[(1+1.66)^ (24-1)]
EMI=Rs. 50,896

An EMI calculator uses the above formula to calculate the EMI on loan in seconds. When using an EMI calculator, you don't need to go through such long calculations of converting different units of loan tenure or rate of interest into months. Neither do you need to use such a formula to do the calculations by yourself.

You simply need to enter the three basic details related to your loan, and you will see your EMI amount within seconds!

Advantages of using Paytm EMI Interest Calculator

Following are the benefits of using the Paytm EMI Interest calculator-

• The Paytm EMI interest calculator helps you get an accurate estimate of the monthly installments that you'll have to pay towards the repayments of your loan
• You can easily plan your monthly expenses accordingly and you can also work on the suitable loan amount
• Additionally, using the Paytm EMI interest calculator also helps in saving a lot of time which would otherwise be involved in calculating the monthly installments. It also avoids any chances of human error
• The Paytm EMI interest calculator is easy, quick and convenient to use

Types of Loan EMI Calculators

Just like there are various types of loans that you can borrow depending on your specific needs, there are multiple types of calculators that help you calculate your EMI for each of these types of loans. Let's take a look at the different types of EMI calculators and how they can be used!

Personal Loan EMI Calculator

Personal loans are general loans that serve multiple purposes. One can borrow a personal loan to fulfill his/her personal needs such as meeting the expenses of a medical emergency, sponsoring a vacation, hosting a wedding, renovating a home, etc. It is, however, important to consider the fact that since personal loans are a type of unsecured loans (ones which do not require a collateral as security), these loans involve a relatively higher rate of interest and have a shorter repayment tenure. Hence, before making the decision of borrowing a personal loan, it is vital that you calculate the EMI that you would be paying beforehand. To do so, you can simply use our Personal Loan EMI Calculator and calculate your EMIs on the personal loan instantly!

Home Loan EMI Calculator

With the increasing demand for residential properties and surging prices, home loans have become a necessity. Since the cost involved in buying a home is quite high, home loans involve a higher principal amount and hence, have a longer time period for repayment. Before you decide to buy a home, you must figure out the amount that you would be giving out as the down payment and calculate the amount that you would be borrowing as a loan. Once that is done, you must use Paytm's Home Loan EMI Calculator to know about the monthly amount that you'd be paying in the form of EMIs towards the repayment of your home loan.

Car Loan EMI Calculator

As we move towards better lifestyles, having a car is no more a luxury as it used to be a few decades ago. It has become more of a necessity that each one of us must have. Buying a car is a substantial investment in itself. Hence, borrowing a car loan is quite a basic thing to do while buying a car. The principal amount on a car loan is not generally very high, owing to which, there is a relatively shorter time duration for the repayment of the borrowed amount. Repayment of the car loan amount within the pre-decided tenure may even lead to forcible taking away of your vehicle. Hence, you must have a fair idea of your EMIs on the car loan. You must also ensure that your EMI equates the amount that you will be able to pay every month, apart from your regular monthly expenses. Paytm's car loan EMI calculator helps you do this, within seconds!