EMI calculator


EMI is the short form for Equated Monthly Instalment. It means exactly what it sounds like – a monthly instalment payment that adds up to a sum that a buyer owes to the seller. Explained in simpler terms, Equated Monthly Instalments are a mechanism of payment devised to improve the affordability of items for the buyers and induce flexibility in payments. EMIs are fixed payments that a buyer or a borrower pays to the seller or lender each month on a fixed date, with or without an interest involved, to pay off the owed amount in full over a while – anywhere between three months to five years (or more, depending upon the principal amount)

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What is 5paisa’s EMI Calculator?

Calculating the EMI manually using the formula can be tedious. 5paisa’s EMI Calculator can help you calculate your EMI with ease. 5paisa EMI calculator is an online tool that helps you understand the design of your Equated Monthly Installment. This calculator determines the amount you would be required to deposit at repayment each month, making it easier to make better financial decisions.
For example, If you borrow a sum of ₹5,00,000. The bank fixes the repayment at 10 years, at an interest rate of 7% per annum.
Based on these numbers, the EMI  can be calculated as follows:
EMI = ₹5,00,000 x 0.07 x [ ( 1 + 0.07)^10 / (1 + 0.07)^9 ]
Therefore, EMI = ₹5,805
Thus, you would need to pay ₹5,805 every month for 10 years to square off the loan in EMIs.

How Does 5paisa’s EMI Calculator Work?

5paisa’s EMI calculator is digitized tool that requires you to input three key values into the tool:
●    Interest rate
●    Principal amount
●    Tenure of the repayment
Based on these three parameters and a prescribed EMI formula, the calculator will determine the amount to be paid each month. The formula for EMI is as follows:
EMI = P x r x [ ( 1 + r )^n / ( 1 + r )^(n – 1) ]
Here, P is the principal, r is the interest rate, and n is the repayment tenure.
In order to determine the EMI amount you need to pay, the 5paisa EMI calculator tool is programmed with an algorithm that utilizes the formula above to generate the EMI amount. Additionally, these calculators also tell you about the total interest you end up paying, and the total principal at the end of tenure.

How to Use 5paisa’s EMI Calculator?

5paisa has a very convenient EMI calculator that only needs a few data inputs by you to tell you about your EMI details. You can begin by entering the following details into the online EMI calculator tool on the 5paisa website:
●    The interest rate applicable for your EMI
●    The tenure of repayment of the loan
●    The principal amount of the loan
Using these three details, the EMI calculator on 5paisa will calculate your EMI details and give you information on the following points:
●    The amount of your monthly installment
●    The total amount of interest you would pay during repayment
●    The total amount of principal you would end up paying, including the interest

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EMI can be calculated using the reducing balance method and the flat-rate method. In the reducing balance method, the amount of EMI keeps reducing with time. In the flat rate method, the EMI amount stays the same throughout.

5paisa’s EMI calculator tells you the amount of monthly installments you would incur on a loan, the total amount you would end up paying as interest by the end of tenure and the total principal including interest that you would be repaying by the end of tenure.

No, you only need the tenure of loan, the interest rate and principal amount to use the 5paisa’s EMI calculator.

In essence, the 5paisa’s EMI calculator uses the fundamental EMI formula to work out the equated monthly installment - the base data remains the same.