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How to Calculate Home Loan EMI Using Formula, Excel and Calculator?


Are you unsure if your lender is charging you a fair EMI? We'll show you how to calculate your instalment so you can compare it to the amount you've been paying per month. An equated monthly instalment (EMI) is a monthly payment made by a borrower to a lender on a set date. The principal and interest are the two components of the EMI. Interest accounts for the majority of the EMI in the early years, while principal accounts for the majority of the EMI toward the end of the term. Obtaining a home loan is not difficult, but paying the monthly EMI is. The EMI calculation is critical not only for a home loan but for every loan you take out. The EMI Calculator assists you in determining how much money you can spend on your home each month. Many who work have fixed salaries, and they must prepare their monthly financial decisions effectively.


Home Loan EMI

Home Loan EMI

Principal Amount

The principal sum refers to the money you borrowed to purchase your home. The interest charged by the lender is applied to the principal sum, also known as the loan amount, and the total amount is split into equal monthly payments. The principal sum is determined by the property's value and the borrower's ability to pay.

Interest Rate

Home loan interest rates are either fixed or floating. In the case of home loans with floating interest rates, the monthly instalments can differ because rates fluctuate according to the base rate. In the case of loans with a fixed interest rate, the EMI remains constant during the loan's term.


Home loans are long-term loans with repayment periods of up to 20 or 30 years. Longer-term home loans have lower monthly payments, but borrowers end up paying more in interest.

Down payment

Lending institutions only provide a portion of the property's value as a loan, leaving the rest to the borrowers. Depending on the cost of the property and the applicant's eligibility, this percentage will range from 75% to 90%. The remaining amount should be paid by the borrower which is called a Down payment.

Different Ways to calculate Home Loan EMI

Different Ways to calculate Home Loan EMI

There are three ways to calculate Your Home Loan EMI

Calculating EMI by Formula Method

The formula to calculate home loan instalments is:

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

Let us understand the mentioned terms.

P - principal amount or the loan amount.

R- interest rate.

Monthly interest rate = [(annual rate/12)/100]

N Total number of months during the loan tenure

For example, suppose you take out a Rs 50 lakh home loan with a 9% interest rate over 20 years. Let's try to figure out your EMIs.

R = [(annual rate /12)/100] = (9/12)/100 = 0.75/100 = 0.0075

N = 240

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

= 50,00,000 x 0.0075 x [{(1 + 0.0075)^240}/{1-(1 + 0.0075^240)}]

= 50,00,000 x 0.0075 x [{6.009}/{5.009}]

= 50,00,000 x 0.0075 x [1.199]

EMI = Rs 44,962

Calculating Home Loan EMI by Excel Sheet

Calculating Home Loan EMI by Excel Sheet

Calculating Home Loan EMI by Excel Sheet

In Excel, the present value of payments (PMT) function can be used to calculate your EMI. PMT is the formula for doing so. Using an Excel spreadsheet to calculate the EMI is one of the simplest methods. Three variables are needed. These are the rate of interest (rate), the number of periods (nper), and the loan's value (or present value) (pv).

The formula which you can use in excel is:

=PMT(rate, nper, pv)

To begin, enter your loan amount, interest rate, and a number of years in the sheet. Remember that you must include the currency symbol when entering the loan number, and you must include the percent sign when entering the interest rate. You could address the tenure in terms of years here.

Calculating Home Loan EMI by using EMI calculator

In addition to almost all banks, a number of financial service providers have free online EMI calculators. This is probably the simplest method for calculating the EMI on a home loan.

Home Loan EMI: Things to Know

Home Loan EMI: Things to Know

Pre Payment- Part transfers are payments that you will make in a lump sum to minimize the amount of money you owe on your loan. Your principal is further reduced when you make a partial payment. As a result, by making periodic partial payments, you can greatly reduce the interest portion of your loan.

Loan Cover- You'll need to buy a loan cover term insurance package that covers the whole loan sum. It's important to do your homework in order to find the best home loan insurance available.

Pre EMI- Pre-EMI is a term that refers to a loan that is being taken out on a property that is still being built. In this situation, the loan is disbursed in phases depending on the number of instalment payments you would make to the developer.

Credit Score- Before applying for a home loan, a borrower should review his or her credit score. A good credit score, ideally over 750, will help you get a low-interest loan.

Charges- Processing fees, late payment fines, and foreclosure costs must all be factored into the equation. It's important to work out these details with the lender right away.

Read more about: emi home loan how to
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