What is EMI?
EMI stands for Equated Monthly Installment. It is a fixed payment amount made by a borrower to a lender at a specified date each calendar month.
How to Calculate EMI
The EMI formula is:
EMI = P × r × (1 + r)^n / ((1 + r)^n - 1)
Where:
- P = Principal loan amount
- r = Monthly interest rate (annual rate / 12)
- n = Number of monthly installments
Example Calculation
If you take a loan of ₹10,00,000 at 8.5% annual interest for 20 years:
- Principal: ₹10,00,000
- Monthly Rate: 0.708%
- Tenure: 240 months
- Monthly EMI: ₹8,678
Tips for Lower EMI
- Make a larger down payment
- Choose a longer tenure
- Compare rates from multiple lenders
- Consider prepayment options
Disclaimer
This calculator is for educational purposes only. We do not offer loans, investments, insurance, credit, or any regulated financial services. Please consult a certified financial advisor before making any financial decisions.