What is Home Loan EMI?

It means a fixed amount of payment that a borrower pays to a lender on a specified date every month as repayment of the home loan taken. The abbreviation of EMI is Equated Monthly Installment.

EMI = Principal amount + Interest on principal amount. This is paid through auto debit instructions to the bank or with post dated cheques.

How is my Home Loan EMI calculated?

You should know what you are paying each month as an Equated Monthly Installment (EMI) or what you are going to pay as a loan installment to your lender. The EMI is calculated on the basis of combinations of following factors namely principal amount, interest rate, tenure of loan and computation method.

EMI Calculation Formula?

EMI = P × r × (1 + r)n/((1 + r)n - 1) where P= Loan amount, r= interest rate, n=tenure in number of months.

Here, E stands for EMI, P means for principle, R means rate of interest every month. N indicates the tenure of loan. The monthly payable amount remains fixed but with passage of time, you will pay less towards interest and more towards principal.

However, to understand how much EMI you need to shell out, the first thing you need to know is that how much loan can you take. To compute your eligibility, you need to provide few basic personal details such as PAN Card No, Date of Birth and professional details like organization’s name, income status and job tenure. These factors affect the chargeable interest rate on your loan. In order to pay dues on time, you need to calculate the accurate EMI in advance. The EMI helps you to assess whether loan is affordable or not.