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# Calculate EMI on Home, Car and Personal Loans

Personal Finance Personal Finance 15-12-2022 | 5 mins read

India’s credit market has been rising steadily. Among credit industries, India is the 4th largest in the entire world. The CAGR in this sector has been pegged at over 11% in the last few years. Short credits form most such advances as credit cards and personal loans. A person should keep the EMI in mind while applying for such loans. This would help them to have a better plan for the future as well as now. On the internet these days, many EMI calculators are available. One can use it for personal loan EMI calculation as well as home loans, car loans and many more.

## What is meant by an EMI?

A financial agreement between the borrower and the lender is known as a loan. The EMI is the monthly payment that a person makes to repay the loan. The concept is simple. The lender gives a certain amount to the borrower, and in return, the person repays the amount with a particular interest charged on it. One can easily calculate the EMIs using a personal loan EMI calculator. It lets the person have a proper plan and also budget for the same. It has been seen almost everyone needs to take a loan of some sort in their lives. In fact, in today’s time, a loan is an essential part of one’s life. These days loans can be of many kinds, but three primary factors are the same for all cases: the actual amount, the rate of interest and tenure.

## What is the use of an EMI loan calculator?

The EMI repays both the total amount and the interest charged. The EMI calculator can be used to know the monthly instalments. The user needs to put the details of the total amount, rate of interest and tenure, and in no time, the EMI gets calculated. The process is straightforward and valuable at the same time. One can get the 24*7 service of an online EMI calculator.

When talking of loans, the very first thing that pops up in our minds is the EMI. It is an abbreviation for Equated Monthly Instalments. Every month there is a particular date by which the EMI needs to be paid. The no. of instalments being produced is also the same as the tenure of the given loan.

Due to EMI, the financial pressure is less on the borrower. This method is more suitable as repaying a large chunk of money can be challenging. EMI allows a large group of people to be able to live their dreams. With the help of a personal loan EMI calculator, one can plan their future budget accordingly. One has the flexibility to choose the tenure and monthly repayment amount.

EMI is dedicated towards both accrued instalments and the total amount. In the initial stage, front loading takes place. It means a significant part of the instalment is directed towards the interest. In the later part, the majority is directed towards the total amount.

## How can the EMI for a loan be calculated?

The critical factors of any loan are principal, tenure and rate of interest. These factors can vary depending on the loan provider. Hence, before going for any loan, it is advised to study the personal loan EMI thoroughly. There are mainly three ways to calculate the EMI:

1. Calculation of EMI with the Help of manual mathematical formula:

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

where,

EMI = Equated Monthly Instalment.

P = total amount.

R = rate of interest. (Monthly rate)

N = Period or tenure. (In months)

EMI can be manually calculated. But it is better to go for digital methods. If done manually, then the chances of mistakes would increase. The manual process is time taking and prone to errors. This formula is universal.

1. Calculation of EMI with the Help of Excel:

Personal loan EMI can be calculated with the help of Excel. The PMT function is used for this calculation. In Excel for EMI calculation, the following syntax is used: PMT (rate, nper, PV).

The above variables mean:

Rate = rate of interest.

Nper = the total number of payments made.

Pv = total amount.

1. Calculation of EMI with the help of the EMI online calculator:

EMI calculator is a finance calculator. It is available online and helps to calculate the EMI. It also helps to compare the different loans for many tenures. Many kinds of EMI calculators are now available in the market:

1. Car loan.
2. Home loan.
3. Personal loan.
4. Loan against property (LAP).
5. Education loan.
6. Gold loan.

## Why is using a loan EMI calculator applicable?

1. One gets an accurate estimation of their monthly payments. This helps them to plan their future finance better. For more chances of one’s loan being approved, the debt-to-income ratio needs to be below 50%.
2. If using a personal loan EMI calculator, then one can save a lot of time. The online method is way quicker than the manual method.
3. The results can be relied upon as it is accurate. Chances of miscalculation are eliminated.
4. It is definite, depending on the different kinds of loans.

## Conclusion

In today’s world, where loans have become so essential, EMIs are an integral part of those loans. The EMI must be calculated so that the monthly budget can be planned in a better way. A personal loan EMI calculator is an essential tool that makes this task easier. If you are looking for a great deal on your personal loan, then “Piramal Finance” is a good personal loan/financing option for buyers. They also have many articles and blogs on a range of finance topics that will improve your skills and knowledge of finance.

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