EMI stands for Equated Monthly Installment. It is a fixed payment amount made by a borrower to a lender on a specific date each month. EMI consists of both principal and interest components.

How is EMI calculated?

EMI is calculated using the formula: EMI = P × r × (1 + r)^n / ((1 + r)^n - 1), where P is the principal loan amount, r is the monthly interest rate, and n is the number of monthly installments.

What is the difference between flat rate and reducing balance EMI?

In flat rate method, interest is calculated on the full principal for the entire loan tenure. In reducing balance method (used by most banks), interest is calculated on the outstanding principal, which decreases each month. This EMI calculator uses the reducing balance method.

How can I reduce my EMI?

You can reduce your EMI by: 1) Making a larger down payment, 2) Choosing a longer loan tenure, 3) Negotiating a lower interest rate, 4) Making prepayments to reduce principal.

EMI Calculator — Loan EMI, Interest & Total Payment

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EMI Calculator

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