The Equated Monthly Installment (EMI) of a home loan can be calculated using the formula:
- EMI = P * r * (1 + r)^n / ((1 + r)^n - 1)
- Where:
- P: is the principal loan amount
- r: is the monthly interest rate (annual rate divided by 12)
- n: is the loan tenure in months
You can also use a home loan EMI calculator to calculate the EMI amount. To use a calculator, you'll need to provide the principal loan amount, interest rate, and loan tenure. The calculator will then provide an estimate of the EMI, repayment amount, and total interest paid over the loan term.
Calculating your EMI before applying for a home loan can help you understand what your loan repayment will entail and compare different deals. It can also help ensure that your EMIs won't impact your regular financial plans. A longer loan tenure can help reduce the EMI.