How To Calculate Home Loan EMI? – Everything One Should Be Aware Of

Thanks to home loans, purchasing a house is easy and convenient today! You no longer need to exhaust all your life savings or wait for years to collect enough money to buy a house. However, a home loan continues for a long time and can keep you indebted for almost two decades until you repay the loan amount. Naturally, it can be stressful if you are unable to manage your loan well.

It is easier to plan your finances if you know beforehand how much you would need to pay. Lenders give you an option to repay the loan in EMIs

What is an EMI?

Equated monthly instalments are the monthly payments you make towards the loan repayment every month. An EMI is calculated as per your loan amount, loan tenure and interest rate. Each EMI consists of a part of the principal amount repayment and the interest on the outstanding amount. You can change your EMI amount by altering your loan tenure. If you want a higher EMI, you can opt for a shorter tenure and vice versa.

How to calculate home loan EMI?

Though the lender would inform you about the loan EMI, you can also calculate the EMI on your own with the help of an EMI calculator and through a mathematical formula.

Through the EMI calculator

You can find a home loan calculator easily online. It is an online tool to help you determine the EMI with the help of loan tenure, interest and loan amount. You can find this calculator on your lender’s website. Often, an EMI calculator also gives you a repayment pattern in the form of interest payout, principle payout and total loan payout.

Through mathematical formula

You can calculate EMI using the following formula.

E = P * r * (1+r)^n / ((1+r)^n-1)


E is the equated monthly instalment amount or EMI

P is the principal loan amount or the loan you want to take

r is the expected rate of interest calculated monthly (dividing the value by 12)

Benefits of calculating home loan EMI

Fast and easy – Using a home loan EMI calculator is convenient and quick. Just input the value in the calculator or in the formula and wait for the results to come. If you are using an EMI calculator, you do not even need to do complex calculations all by yourself. It makes all your EMI calculations fast. You can search for an EMI calculator online and calculate the EMI amount instantly.

Accurate You no longer need to rely on the lender to tell you the EMI value as you can easily do that yourself. With a calculator, there are no chances of any error or mistakes and you can be  rest assured that your results are correct.

Aids in planning – By calculating the EMI, you can plan your finances in a better way. You can know beforehand if you will be able to repay the loan with the current tenure. If there is any difficulty, you can simply alter the tenure of the loan to get an EMI amount that fits your budget.

Simply put, using an EMI calculator to calculate a home loan EMI even before applying for a home loan can be beneficial for you at various levels. It helps you avoid going through several processes before applying for any type of loan. Not just for home loan, an EMI calculator is a necessary tool to use before availing any type of loan.