What is EMI? How to Calculate EMI? EMI Calculator

In today’s world, owning a car, a house or even a new smartphone has become much easier, thanks to the availability of loans and financing options. One of the most popular financing options is the Equated Monthly Installment (EMI). In this article, we will discuss EMI and EMI calculator, how it works, and how they can help you make better financial decisions.

What is EMI?

EMI stands for Equated Monthly Installment. It is a fixed amount that a borrower has to pay every month to the lender until the loan is fully repaid. The EMI comprises two parts – the principal amount and the interest charged on it. The principal amount is the amount of money borrowed, and the interest is the cost of borrowing. The EMI remains the same throughout the loan tenure, but the proportion of principal and interest changes with each payment.

How Does EMI Calculator Work?

An EMI calculator is an online tool that helps you calculate the EMI you will have to pay based on the loan amount, tenure, and interest rate. To use an EMI calculator, you need to input these three details, and the calculator will give you the EMI amount.

For example, let’s say you want to take a loan of INR 1,00,000 for a tenure of 2 years at an interest rate of 12% per annum. Using an EMI calculator, you can find out that your monthly EMI will be INR 4,691. The calculator will also show you the total interest payable over the loan tenure, which, in this case, is INR 12,187.

Benefits of using an EMI Calculator

  1. Helps You Plan Your Finances Better: An EMI calculator helps you plan your finances better by estimating the EMI you will have to pay. This helps you plan your monthly expenses and budget accordingly.
  2. Saves Time and Effort: Calculating EMI manually can be time-consuming and complex. An EMI calculator simplifies the process and gives you accurate results within seconds.
  3. Enables Comparison: With an EMI calculator, you can compare the EMIs of different lenders and choose the one that suits your budget and requirements.
  4. Helps You Make Informed Decisions: By calculating the EMI and the total interest payable, an EMI calculator enables you to make informed decisions about your finances.


EMI is a popular financing option that helps individuals achieve their financial goals. An EMI calculator is an online tool that simplifies the process of calculating the EMI and helps you make better financial decisions. By using an EMI calculator, you can plan your finances better, save time and effort, compare different lenders, and make informed decisions.


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