EMI Calculator
Plan your loans with confidence. Calculate your monthly EMI, total interest, and see a full amortization schedule.
Loan Details
Monthly EMI
₨ 0
Total Interest
₨ 0
Total Payable
₨ 0
Amortization Schedule (Year-wise)
| Year | Principal Paid | Interest Paid | Total Payment | Balance |
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The Ultimate Guide to Calculating EMIs.
When you decide to purchase a home, a car, or even to finance your education, more likely than not, you will need a loan. Managing that loan requires an understanding of your Equated Monthly Instalment, or more commonly known as your EMI payments. An EMI calculator gives you a sense of what you would owe in a single month, as well as the overall interest that will accrue over the duration of the loan. This complete guide will dissect the intricate details of an EMI, offer powerful insights into the loan EMI calculator, and help you make more informed decisions in the future.
How to use our Advanced EMI Calculator?
This tool is aimed to be as interactive as possible to make sure that you have a full understanding of the details of your loan:
Adjust Loan Amount: This top slider allows you to set a loan figure. For home loan EMIs, you will have a huge figure, and seeing the exact amount in real-time is perfect.
Rate of Interest: Slide to set the interest as a percentage of the total loan borrowed.
Decide the Loan Tenure: This will be the third slider, and determines the loan duration in years.
Get Real-Time Insights on Your Outcome:
Monthly EMI: Your results are displayed in this screen, which primarily features the fixed monthly payment.
Visual Breakdown: The pie chart instantly shows the split between the total principal (the money you borrowed) and the interest you’ll pay.
Total Payments: Over the life of the loan, you can track the total interest along with the total amount you will have fully paid back.
Review the Amortisation Schedule: By scrolling down, you will see a year-wise table for principal and interest annual payments along with the leftover balance each year.
What is EMI? A Simple Explanation
An Equated Monthly Instalment is more commonly referred to as EMI. A fixed payment amount made by the borrower to the lender is paid each month for a specified duration. EMIs ensure that over a certain period of time, the loan is fully paid by covering both the interest and principal.
Two parts that constitute each EMI payment are:
Principal Repayment: The payment made by the borrower that serves to decrease the outstanding loan amount by some value.
Interest Payment: The repayment made by the borrower to the lender, as a by-product, for the loaned amount.
At the beginning of the loan, the interest portion of the EMI is large, and the principal is fairly small. What happens as the loan ages? This ratio flips.
The Formula Behind the EMI Calculator
Mathematics can be complicated, but having formulas can make understanding simpler. Our tool does the complex work, but the breakdown of the formula to the EMI is:
EMI = P × r × (1 + r)ⁿ / ((1 + r)ⁿ -1)
Where:
P = Amount of principal loan
r = Monthly interest as a fraction (annual interest divided by twelve)
n = The total number of instalments (loan duration in years x twelve)
To illustrate, consider a loan of ₨50,00,000 for a duration of 20 years, with a 12.5% interest per year:
P = 50,00,000
r = (12.5 / 100) / 12 = 0. 0104167
n = 20 × 12 = 240 months
Inserting them into the formula can give you the exact EMI. This is complex work, but our EMI tool can do it in milliseconds!
An Amortisation Schedule Overview
An amortisation schedule showcases the amount each borrower owes different segments of the principal and interest of a loan within a particular timeframe. It captures all the loans that fall due within a particular period and the brackets of time within which they fall due. Each payment period of a loan is broken down into a payment schedule in a table format, which is known for having an amortization schedule for that loan. It is under the ‘year-wise breakup’ that a user gets details of a loan within a calendar year. This is for a user’s benefit due to the following reasons:
Financial Planning: Understanding the principal balance decreases and the rate at which it declines each year
Prepayment: Projection of how extra payments affect the interest left on a loan
Tax: Providing the total interest paid for tax-deductible loans. It declares the interest paid for loans taken out to acquire a home.
In What Types of Loans Is an EMI Calculator Useful?
Different instruments of credit in Pakistan, ranging from home loans to auto loans, can all have their EMIs calculated online:
Home Loan EMI Calculator: Get a comprehensive snapshot to assess the credit requirement and prioritise.
Car Loan EMI Calculator: Understand the payment structures on both new and used vehicles.
Personal Loan EMI Calculator: Assess funds needed for payable personal expenses, such as weddings, vacations, or medicines.
Education Loan Calculator: Capture all funds needed for payments of education-related expenses, such as tuition fees.
Frequently Asked Questions (FAQs)
Changing Loan Tenure and EMIs
In case of longer tenures, say 30 years, EMIs and monthly repayments will be lower. However, paying over 30 years will incur a substantial increase in the total interest paid. Conversely, a 15-year tenure will incur a higher monthly fee; however, will greatly decrease the interest paid, and the asset will be acquired faster. Use the sliders on the calculator to visualise this difference.
What is the difference between a flat rate and a reducing balance rate?
The calculator features a reducing rate balance, which is flat and standard in all home and car loans nowadays. In this method, the interest is varied based on the monthly outstanding loan total. A flat rate of interest charges the whole tenure for the total principal, which is less common and more expensive.
Is this loan calculator free?
Yes, for all users, this loan calculator for Pakistan is free of charge, and payment is not required.
Can I use this calculator for any currency?
Although the interface defaults to Pakistani Rupees (₨) to be the most relevant for the Pakistani context, the underlying formula is universal, and you can input any currency (dollars, euros, et) and the resulting EMI will be in that currency.
Conclusion
Taking a loan is a critical decision. An EMI calculator is the first and most vital step in your journey to financial awareness and responsible borrowing. Our tool equips you with a transparent, visual, and detailed breakdown of your loan so you can effortlessly compare, budget, and take control of your financial future.
