Equated Monthly Installment (EMI) is the amount that you pay every month to the bank or any other financial institution for a loan that you have taken from that institution.
EMI is made up of two components 1) The interest on loan 2) The portion of the principal amount to be repaid.
The EMI is paid monthly and is a constant amount for the duration of the loan. However the part of the amount of the EMI that goes to pay the interest and the principal changes over the tenure of the loan. As a rule of thumb, you will pay more principal with each subsequent EMI than what you paid in the previous EMI. Towards the last 25 % of the EMI you will pay a lot more principal than the interest.
EMI is calculated with the basic formula:
E is EMI
P is Principal Loan Amount
r is rate of interest calculated on monthly basis. (i.e., r = Rate of Annual interest/12/100. If rate of interest is 10.5% per annum, then r = 10.5/12/100=0.00875)
n is loan term / tenure / duration in number of months
This looks complicated! Doesn't it? Don’t worry. You can use our EMI calculator to get the same result automatically without any hard work from your side. Not only do we automate the calculation but we also show you graphs that help you understand your EMI better.
The mymoneykarma.com EMI calculator can help you in the following ways:
Calculate EMI in seconds – Our EMI calculator will help you calculate exactly the EMI you will need to pay for your loan every month.
Assist you to plan your finances - Compare various options of EMIs by varying loan criteria of tenure, principal amount and interest rate. Having the knowledge of all these options of EMI will help you choose the loan that is best suited for you.
Simplify calculations – As you have seen the formula for EMI calculation is extremely complex. However to make the best decision you might need to see the data in many different scenarios. Our calculator makes these calculations simple for you and helps you make an informed decision without getting into manual calculations.
With useful charts and automated results, mymoneykarma.com EMI Calculator is easy to use and very intuitive to understand. You can calculate EMI for any loan including home loan (or housing loan), car loan (or auto loan), personal loan or education loan.
To use the calculator complete the following information in the EMI Calculator:
You can either enter the values in the boxes or use the slider to input the values for all the parameters. Once you have entered the values the calculator will automatically calculate the EMI amount for you.
The calculator also displays a pie chart that breaks up the total payment for the loan into principal and interest components of the amount paid by displaying the percentage and amount paid for these components. This information will help you figure out the cost of the loan you are taking and choose the option where you pay the least interest.
We all love our new cars and many times take loans to buy them. Car loan is a peculiar kind of loan where you have to make two major decisions; First, which car to buy and second, the car loan to buy your car. Many of us spend a lot of time on making the decision for the car and negotiating with the dealers on the price and deals on the car. However, what we miss out is getting into details on the car loan that we will take from the lender for buying this car. This behavior results in us taking auto loans that cost us a lot more than they should have and eat into the saving that we made by negotiating hard for a good deal on the car. While the logical thing is to negotiate both we end up doing that for the car as that is tangible and we can see that in front of us.
Therefore use the mymoneykarma.com car loan calculator to evaluate auto loan options before you finalise the one that is the best for you.