How to Calculate EMI on Your Home Loan

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When you borrow a home loan, it is better to calculate the EMI beforehand to know exactly the amount you must repay every month. Read on to know to calculate the EMI. 

A home loan is usually a high-value loan, and it often lasts for a long period. This means, as a borrower, you are obliged to repay the EMIs till the end of the loan tenure. And, to ensure that the EMIs don’t become a burden and affect your finances, you must plan the repayment well in advance. 

One of the best ways to plan your finances is to know the exact EMI payable every month for the amount you borrow. You can calculate the amount using the loan EMI calculator

What is a home loan EMI calculator?

As the name suggests, the loan EMI calculator is an online tool that allows you to compute the exact EMI payable against the home loan you have borrowed. The calculator has three important components, including –


  • The interest rate (fixed by the lender)
  • The loan duration (in months)
  • The principal amount (the amount you borrow)

The calculator allows you to understand the EMI amount you must pay over a specific period at an interest rate fixed by the lender. Today, as most of the lenders in India offer online services, you can find this tool on all lender’s websites. 

The best thing about using the home loan EMI calculator is that it is available for free. You can try different permutations and combinations of interest rate, loan duration to ensure that the EMI is affordable. 

The formula for calculating EMI

The home loan EMI calculator uses the below formula to calculate the EMI amount –

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

In the above formula, 

  • P = Principal amount
  • R = Interest rate
  • N = Repayment tenure

 How does the home loan calculator work?

To calculate the monthly EMI on the home loan, you must enter the details or adjust the sliders on the calculator. Depending on the type of calculator available on the website, you can easily move the slider from left to right or vice-versa. 

You can keep changing and adjusting the figures while the calculator computes the EMI instantly and accurately. 

Benefits of using a home loan EMI calculator

Now that you know how the loan EMI calculator works and the formula used to compute the EMI, it would help to know the benefits of using the calculator. 

It gives you an accurate breakup of the loan charges

An EMI calculator can help you know about the various charges associated with the home loan, such as the total interest payable, processing fees, stamp duty, etc. Knowing about these charges will help you know the overall loan cost. 

  • It helps avoid the hassles of manual calculations

Calculating the home loan EMI amount can be tedious. And, if you are a first-time borrower, the task can seem to be overwhelming. Also, there is always a risk that you would commit a mistake during the calculation. This could mean that you would miscalculate the EMI amount, and it can put off your financial planning. 

To avoid this mistake, it is better to use the online EMI calculator. This will help you get accurate results within a few seconds. 


  • It allows you to compare the home loan rates

Every lender offers home loans at different interest rates. Even if the loan interest rate differs by 0.2%, it can significantly impact the overall loan cost in the long-run. And consequently, it can reduce EMI. Thus, by using the calculator, you can compare the interest rates by different lenders and choose the right lender with an affordable interest rate. 

Final Word

Thus, the home loan EMI calculator is a useful tool that allows you to calculate the EMI beforehand and make an informed borrowing decision. 




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