EMI stands for 'Equated Monthly Installment.' It is the fixed payment amount a borrower makes to a lender at a specified date each month. Each EMI payment includes both a principal component and an interest component.

How does loan tenure affect my EMI?

Loan tenure has an inverse relationship with your EMI. A longer tenure (e.g., 30 years) will result in a lower monthly EMI payment, but you will pay significantly more in total interest over the life of the loan. A shorter tenure (e.g., 15 years) will have a higher EMI, but you will pay far less total interest and be debt-free sooner.

Does this EMI calculation include taxes and insurance?

No. This is a simple EMI calculator that only calculates the Principal and Interest (P&I) portion of your payment. For mortgages, your total payment (called PITI) will also include property taxes and homeowner's insurance. Please use our full Mortgage Calculator for that.

Loan EMI Calculator | Calculate Your Monthly Loan Payment

What is a Loan EMI Calculator?

A **Loan EMI Calculator** is a simple financial tool that helps you calculate your **Equated Monthly Installment (EMI)**. The EMI is the fixed amount of money you pay to a lender (like a bank) every month to repay a loan. This **loan payment calculator** is essential for budgeting because it instantly tells you the exact **monthly loan payment** you'll be responsible for, allowing you to see if you can afford the loan before you apply.

What is the Formula of the Loan EMI Calculator?

The EMI calculator uses a standard formula to find the fixed monthly payment. It takes the loan amount, the interest rate, and the loan term, and spreads the repayment evenly across every month.

EMI = P × r × (1 + r)ⁿ / [ (1 + r)ⁿ - 1 ]

Here’s what that means in simple terms:

P = Principal Loan Amount (the total amount you are borrowing).
r = Monthly Interest Rate (Your "Annual Interest Rate" is divided by 12 and by 100. For example, 8.5% becomes 0.007083).
n = Number of Months (Your "Loan Tenure" in years multiplied by 12. For example, 10 years is 120 months).

Solved Example for an EMI Calculation

Let's use the calculator's default values to find the EMI for a personal loan:

Loan Amount (P): $100,000
Annual Interest Rate: 8.5% (which is 'r' = 0.007083 per month)
Loan Tenure: 10 years (which is 'n' = 120 months)

Calculation Steps:

1. Plug values into the formula:
EMI = $100,000 × 0.007083 × (1 + 0.007083)¹²⁰ / [ (1 + 0.007083)¹²⁰ - 1 ]

2. Solve the equation:
EMI = $100,000 × 0.007083 × (2.3335) / (1.3335)

Monthly EMI = $1,239.86

Total Payment: $1,239.86 × 120 months = $148,783.20
Total Interest: $148,783.20 - $100,000 = $48,783.20

This shows that for a $100,000 loan, your **monthly loan payment** will be $1,239.86, and you will pay a total of $48,783.20 in interest over the 10 years.

Use Cases / Practical Applications

An **EMI calculator** is your first step in financial planning for a major purchase. Use it to:

Check Affordability: Before you even look at houses or cars, find out what the **monthly loan payment** would be to see if it fits your budget.
Compare Loan Offers: Easily compare two different loan offers. Is a 7.5% rate from one bank better than a 7.9% rate with a longer tenure from another? This calculator gives you the answer in seconds.
Plan for Prepayment: Once you know your base EMI, you can plan to pay *extra* each month to save on interest.
Negotiate with Lenders: By knowing exactly what your payment *should* be, you can confidently discuss terms with a loan officer.

Standard or Common Reference Values

While interest rates change daily, here are some general "Standard Values" to help you estimate your payments:

Mortgage (30-Year Fixed): 6.5% - 8.0%
Mortgage (15-Year Fixed): 6.0% - 7.5%
Car Loan (5-Year): 7.0% - 9.0% (for good credit)
Personal Loan (3-Year): 10.0% - 15.0% (for good credit)

Frequently Asked Questions (FAQ)

1. What is the difference between principal and interest?

The **Principal** is the amount you borrowed ($100,000 in the example). The **Interest** is the fee the bank charges for lending you the money ($48,783 in the example). Your EMI is a mix of both.

2. How can I lower my EMI?

There are three ways to get a lower **monthly loan payment**: 1) Choose a *longer* loan tenure (e.g., 15 years instead of 10), 2) Get a *lower* interest rate, or 3) Borrow *less* money (make a larger down payment).

3. Why is my "Total Payment" so much higher than my "Loan Amount"?

The "Total Payment" includes all of your principal *and* all of the interest you will pay over the entire life of the loan. The difference between "Total Payment" and "Total Principal" is the total cost of borrowing the money.

Knowing your **Equated Monthly Installment** is the first step to smart borrowing. Next, see the full payment-by-payment breakdown with our Loan Amortization Calculator to understand where every dollar goes.

Loan EMI Calculator

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