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Know Your Monthly EMI

What is an EMI?

A loan is a contract for lending money for interest between a lender and a loan seeker. Under this contract, the lender lends a sum of money with the intention that the loan seeker will repay the loan in equal monthly installments over a defined period. These installments consist of both principal and interest. An EMI calculator is the simplest way to figure out your monthly payments and adjust your budget. Everybody needs to take out a loan at some point in their lives, whether it’s to pay for a house or car, an education for a child, or to consolidate debt.

As a result, loans now play a significant role in everyone’s lives. Although loans can be used for various things, their main features—loan amount, loan tenure, and interest rates—remain constant.

What is a Loan EMI Calculator?

The monthly installment made towards loan repayment is known as the EMI. The EMI amount is made up of both the principal and accrued interest. The EMI calculator can be used to determine your monthly loan EMI payments. The EMI will be displayed as soon as you enter the loan’s variables, such as the principal amount, term, and interest rate. Therefore, you may quickly determine your loan’s EMI by utilizing the online EMI calculator, which makes the process simple. Online loan EMI calculators are accessible whenever you need them. Therefore, you are free to calculate or compare different loan EMIs as much as you choose.

Typically, EMIs are fixed. However, the loan EMIs can change if loans have floating interest rates and prepayments. Several loan-related variables determine your monthly EMI. Using the formula for calculating EMI, you can choose the EMI that applies to your loan. However, using the formula to calculate EMIs is a difficult operation that requires numerous calculations. An EMI calculator is a better option because it can calculate EMIs quickly once you enter your data.

How are Loan EMIs Calculated?

Calculate Your EMI Using The Following Formula

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

The variables in this formula stand for:

The EMI stands for the equated monthly installment.

P stands for the loan’s principal, or the amount borrowed.

R stands for the interest rate applied to the loan amount (the interest rate should be the monthly rate).

N is the loan repayment period or the total number of monthly payments you will make (tenure should be in months).

This is the formula an EMI calculator employs to give you the accurate EMI payable instantly.

To further understand EMI calculations, let’s look at an example.

For instance, you have a personal loan of INR 2 lakh with a 2-year term and a 20% annual interest rate.

First, we must turn the tenure into months and the annual interest rate into a monthly rate.

By dividing the annual interest rate by the number of months in a year, or 12, we can find the monthly interest rate, which is 20/12 = 1.66% per month. In decimals, it is 0.0166.

Before incorporating the 2-year loan tenure into the formula, it must first be converted to months. The loan tenure is 24 months.

Now that we have all three variables, we can incorporate them into the formula as follows:

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

EMI= [2,00,000 x 0.0166 x (1+0.0166) ^ 24] / [(1+0.0166) ^ 24 – 1]

EMI= INR 10,179

The EMI calculation formula is generic and works for all loans. The principal loan amount, term, and interest rate are the three main factors that influence how much EMI you will pay. The loan’s EMI payment is directly correlated to the loan’s principal and interest rate, meaning that when these variables rise, so do the EMI payments.

Although the amount of total interest increases with longer tenures, the EMI payments fall if the loan is repaid over a longer period. 

  • Calculate Loan EMIs Using Online Loan EMI Calculator

You may calculate your EMIs and compare EMIs for various loans and tenures using the online EMI calculator, which is a financial calculator accessible online.

Based on the different loan kinds, there are various sorts of EMI calculators for different loans including: 

  • Car loan
  • Home loan
  • Personal loan
  • Student loan

You can use the EMI calculator that best suits your needs, even if they are all based on the same three variables.

Benefits of EMI Calculator

An EMI calculator’s key advantage is that it helps you budget your monthly loan payments, so they don’t put too much pressure on your finances. In addition, you can choose an EMI amount that can comfortably be repaid throughout the loan period with the aid of a loan EMI calculator. Then, you can decide on how much loan you can take and the tenure.

The advantages of using this calculator go much beyond what was indicated above. It has numerous benefits, including the following:

  • Anytime Access

You can use the EMI calculator at any time and from any location. The calculator is available for as many uses as you like. For example, you can browse the internet and utilize the EMI calculator rather than going to the bank branch or engaging in difficult mathematical calculations.

  • Accurate Results

The possibility of creating errors exists when you perform computations manually. Additionally, performing the same calculations repeatedly can result in more errors and inaccurate results. The likelihood of inaccuracies grows further when you compute EMIs for loans provided by multiple banks separately. You can quickly and accurately perform all these calculations with the online EMI calculator.

  • It Saves You From Time-Consuming and Complex Calculations.

Using the same formula repeatedly to compare loans offered by various banks can get highly monotonous and time-consuming. To calculate EMIs for a loan with a pen and paper, you need to put in a lot of time. With this online application, you have the advantage of saving your valuable time and finishing all the laborious and tedious computations quickly. Thus, from the comfort of your house, you can experiment with as many combinations of amount, tenure, and interest rates as you choose.

  • Aids the Financial Planning Process

You can determine the amount you will be required to pay every month for a given amount, length, and interest rate with the help of this tool. This enables you to budget your money before applying for the loan so that your monthly spending plan is not affected much. You can also adjust the loan parameters to find the best EMI for your needs.

How P2P Lending Can Help You Repay Your EMIs Easily?

To expand your portfolio and repay your EMIs, it is always a good idea to consider various investment alternatives. Thus, your risk is reduced, and your rewards are maximized. You can use the returns from your investments to cut down your loan burden and close the loan before its tenure. You can also reduce your monthly EMI payments by paying a lump sum amount towards your loan when you have bulk money. Your investments make this possible. You can make investments in safer options like fixed deposits and government bonds. Consider investing in stocks if you have a high-risk tolerance. One of the rapidly growing investment opportunities made possible by technology is P2P lending. The fixed maturity peer-to-peer investment plan from LenDenClub offers annual returns of up to 10–12% P.A. on your investment. 

LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping investors diversify their investments beyond traditional investment instruments ever since.



The Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by Innofin Solutions Private Limited, and does not provide any assurance for repayment of the loans lent through its platform.

LenDenClub is an Intermediary under the provisions of the Information Technology Act, 2000 and virtually connects lenders and borrowers through its electronic platform via the website and/or mobile app.

The lending transaction is purely between lenders and borrowers at their own discretion, and LenDenClub does not assure loan fulfilment and/or investment returns. Also, the information provided on the platform is verified or checked on the best efforts basis without guaranteeing any accuracy of the data/information verification. Any investment decision taken by a lender on the basis of this information is at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower, fully or partially. The risk is entirely on the lender. LenDenClub will not be responsible for the full or partial loss of the principal and/or interest of lenders’ investment amounts.


*P2P investment is subject to risks. And investment decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

** Average value mentioned is the weighted average of returns received by investors

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