Equated Monthly Instalments or EMIs are fixed amounts paid by the borrower on a fixed date every month to the financial institution towards loan repayment. Calculating the EMI in advance helps to know the affordability of the borrower, plan the finances better and also select a suitable bank. This calculation can be done by using EMI Calculator, an online tool.           Â
The LAP EMI Calculator available on Paisabazaar.com can be used to compute your monthly EMI while availing a mortgage loan. This significantly helps in taking a clear and better decision by comparing different loan deals. By providing the details of the loan principal amount, applicable interest rate and loan tenure, you can get to know the monthly instalment to be paid.
You can also calculate your monthly EMI amount manually using the below-mentioned formula. However, we would suggest you to avoid the hassle of paper-pen work and save time by using Paisabazaar.com’s Mortgage Loan EMI calculator, which provides accurate results along with the break-up of total payment in the form of Amortization Schedule.
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
In the above-mentioned formula,
EMI -Â Equated monthly instalment
P - Principal amount (borrowed amount)
R - Applicable rate of interest (monthly basis)
N - Loan tenure or number of EMIs
Factors Affecting EMI
There are 3 important factors that affect the EMIs to be paid by the borrower towards loan repayment. These are:
Principal amount: This is the loan amount borrowed from a bank or NBFC. The loan amount offered to the borrower is majorly decided by the market value of the mortgaged property. Larger the principal amount, bigger are the EMIs.
Tenure: This is the time period decided by the borrower for repaying the loan amount. However, the borrower’s present age and the retirement age might affect his/her liberty to choose a longer loan tenure. Longer the loan tenure, smaller the EMIs.
Rate of interest: The interest rate applicable on Loan Against Property is decided by the bank, and is considered as a critical factor affecting a borrower’s ability to take a bigger loan. Banks/NBFCs offer mortgage loan on either fixed or floating type of interest rate.