You can compute the EMI for a home loan using the formula:
EMI Amount = [P x R x (1+R)^N]/[(1+R)^N-1], where P, R, and N are the variables.
P = Principal loan amount
N = Loan tenure in months
R = monthly interest, and it is calculated per month.
Annual Rate of interest: 12/100
For example, if the rate of interest is 7.5% per annum, then r = 6.70%
If a person avails a loan of ₹10,0000 at an annual interest rate of 6.70% for a tenure of 20 years, then his EMI will be calculated as under:
EMI= ₹10,0000 *0.067 * (1 + 0.067)240 / ((1 + 0.067)240 - 1) = 757
The total amount payable will be 1,81,774. The principal loan amount is Rs. 1,00,000, and the interest amount is 81,774.
Computing the EMI manually using the formula can be tedious.
Therefore you can use EMI calculators. CreditMantri’s home loan EMI calculator can be used to calculate the EMI amount.
Also Read: How to calculate Home loan interest