📊 Loan EMI Calculator with GST

Frequently Asked Questions

What is the full form of EMI?

The full form of EMI.

 

E=Equated
M=Monthly
I=Instalment

It refers to a fixed amount that a borrower pays to a lender every month to repay a loan or debt. This repayment plan ensures that the total debt is paid off over a specific period.

EMI Formula

The most common formula used to calculate EMI is the fixed installment formula, derived from the amortization formula:

EMI=P×r×(1+r)n(1+r)n−1

Where:

  • P = Principal loan amount

  • r = Monthly interest rate (Annual rate ÷ 12)

    • If the annual interest rate is R%, then r=R12×100

  • n = Loan tenure in months

Example Calculation

Suppose you take a loan of ₹10,00,000 at an annual interest rate of 10% for 5 years (60 months).

  1. Convert annual rate to monthly rate:

    r=1012×100=0.008333

  2. Apply the formula:

    EMI=10,00,000×0.008333×(1+0.008333)60(1+0.008333)60−1

  3. Calculate using exponents:

    (1+0.008333)60≈1.6453

  4. Final EMI:

    EMI≈10,00,000×0.008333×1.64530.6453≈₹21,247 per month

EMI (Equated Monthly Installment) 

is used to split a large payment into smaller, fixed monthly amounts, making expensive purchases (like homes, cars, phones) affordable.

Why EMI?

No Need for Full Payment – Buy now, pay in parts.

Budget-Friendly – Fixed monthly payments help manage expenses.

  1. Flexible Tenure – Choose short (less interest) or long (lower EMIs) repayment periods.

  2. Boosts Spending – Helps businesses sell more, customers buy more.

  3. Credit Score Benefits – Timely EMIs improve credit history.

⚠️ Caution: Interest increases total cost; missing EMIs hurts credit score.

Example: A ₹50,000 phone on 6-month EMI = ~₹8,333/month (interest extra if applicable).

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