Smart EMI Calculator
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₹50L
1 Year
30 Years
0.5%
20%
YOUR MONTHLY EMI
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Calculated for 5 years at 8.5% interest rate
Principal Amount
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Total Interest
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Total Payment
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Understanding EMI Calculations
An Equated Monthly Installment (EMI) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. EMIs are used to pay off both interest and principal each month so that over a specified number of years, the loan is fully paid off along with interest.
How EMI Works
The EMI consists of two components: the principal amount and the interest on the principal amount, divided across each month of the loan tenure. In the initial years of your loan, a larger portion of your EMI goes towards paying the interest. As you progress through the loan tenure, the portion of interest reduces and the principal repayment increases.
Key Factors Affecting EMI
- Loan Amount: Higher the principal amount, higher will be the EMI
- Interest Rate: Lower rates reduce your EMI burden significantly
- Loan Tenure: Longer tenures reduce EMI but increase total interest
- Processing Fees: Some lenders charge processing fees which affect overall cost
Smart Borrowing Tips
- Always compare interest rates from multiple lenders
- Consider prepayment options to reduce interest burden
- Maintain a good credit score for better interest rates
- Ensure your EMI doesn't exceed 40% of your monthly income