EMI or equated monthly installment is a fixed amount of money you pay to the bank monthly to repay your loan. It is equal to the principal amount plus interest on the loan amount, divided by the number of months in the loan tenure. You can use a home loan EMI calculator to calculate your monthly installments.
To calculate your EMI, you need to know the following information:
· Loan amount
· Interest rate
· Loan tenure
This information lets you use a home loan EMI calculator to calculate your monthly installments.
The formula for calculating EMI is as follows:
EMI = [P x I x (1+I)^N]/[(1+I)^N-1],
P = Loan amount
I = Interest rate (p.a.)
N = Loan tenure (in months)
For example, if you take a loan of Rs. 30 lakhs at an interest rate of 10% p.a. for a tenure of 20 years, your EMI will be Rs. 29,903.
EMI is the best way to repay your loan
Loan amount: The total amount of the loan taken
A loan amount is the total amount of money that you borrow when you take out a loan. This amount can be different from the amount you actually receive, depending on the terms of your loan. For example, if you take out a $100,000 loan with a 5% origination fee, you will only receive $95,000. The other $5,000 goes to the lender as a fee.
The loan amount is also different from the loan balance, which is the amount of money you still owe on the loan. The loan balance will decrease as you make payments, but it will never be less than the loan amount.
When you are considering taking out a loan, it is important to know how much money you will actually receive, so that you can budget accordingly. The loan amount is just one factor that will affect your monthly payments and the total cost of the loan.
Interest rate: The interest rate charged on the loan
When you take out a loan, the interest rate is the percentage of the loan amount that you will pay in interest over the life of the loan. The higher the interest rate, the more you will pay in interest. The interest rate also affects your monthly payment. A higher interest rate will result in a higher monthly payment.
The interest rate charged on a loan can be fixed or variable. A fixed interest rate means that the interest rate will remain the same for the life of the loan. A variable interest rate means that the interest rate can change over time.
The interest rate charged on a loan also depends on the type of loan. For example, a mortgage loan typically has a lower interest rate than a credit card loan.
The interest rate charged on a loan can have a major impact on the total cost of the loan. If you are considering taking out a loan, be sure to compare interest rates from multiple lenders to get the best deal.