Equated Monthly Instalment(EMI) is an amount that the individual needs to pay to the financial institution from where he has borrowed a loan. When an individual borrows a loan from a bank or non-banking financial intuitions or money lenders even at the lowest interest rate personal loan the repayment of the loan which is called EMI must be borne by the individual who borrows the loan.EMI calculator or the rate of interest calculator is the most efficient method to calculate loan EMI

EMI Calculator Usage:- In Emi Calculator please enter the following parameters.

1) Total investment Amount,

2) Rate of Interest

3) Tenure. Based on these parameters the EMI Calculator calculates loan EMI based on the amount that will be accrued on maturity and given to the investor.

EMI is the total Principal amount borrowed plus Interest divided by the tenure(number of months the amount has been borrowed) which is the amount repayable to the lender and needs to be paid on monthly basis. The interest component of the EMI is huge during the very initial period and then reduces gradually with the passage of the months and the payments made each month. The EMI Calculator is a very handy tool that comes to the rescue when you need to do these complex calculations. Two methods to calculate interest are described below. One is simple interest and the other is compound interest.

### Simple Interest: A = P (1 + rt)

Where: –

• A = total amount that you can expect to receive (principal + interest)
• P = the principal amount you invested
• r = the interest rate
• t = the investment tenure

Say if the Principal is 1 lakh for 1 year at 6% interest using the above formula the interest is 1,06,000 Interest is (A-P) that is 1,06000-100000 = 6000

### Where: –

• A = total amount that you can expect to receive (principal + interest)
• P = the principal amount you invested
• r = the interest rate
• t = the investment tenure
• n = frequency of compounded interest (like monthly, quarterly, annually, etc.)

EMI can be calculated as follows

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

P is the principal amount

R is the rate of interest

N is the period or tenure

EMI calculator is a great aid which helps in future budget planning. The EMI calculator depicts a clear idea indicating the amount the individual must pay towards the loan taken in the form of EMI. The EMI calculator helps to calculate loan EMI and plan the expenses accordingly to ensure the outflow towards loans seamlessly every month.

EMI calculator with appropriate details helps to estimate the loan amount and the tenure to avail the loan amount so that the individual can determine the lowest interest personal loan. Knowledge of EMI calculations and usage of an EMI calculator is very important to get to know the eligibility of how much amount of loan can be availed and budget planning to have a very good and better borrowing experience. This understanding gives the individual the journey of borrowing a  breeze

To understand the concept of what an EMI Calculator is:- EMI Calculator is analogous to any other calculator. It is also called the rate of interest calculator means uses the EMI Calculator to calculate EMI based on tenure and rate of interest.

The EMI calculations are not simple and hence the EMI calculator comes in handy to help you calculate the monthly amount that the individual needs to pay toward the loan

The EMI calculator or rate of interest calculator can easily be found on the money lender’s websites online. It can also be found on nationalized banks’ websites and financial institutions’ websites and the websites of private sector banks.

The EMI calculator helps you know the total interest amount and due interest amount for an ongoing loan.

The EMI Calculator functionality is super simple and convenient where you can enter the loan amount, the tenor, and the interest rate published on the website and you are all set.

Hence EMI calculator gives a very clear idea of the expected EMI based on the principal amount, tenure, and rate of interest so that the budget can be planned accordingly.