Ideally, you should calculate your loan EMI in advance to understand your monthly repayment obligations. You can do so either with the help of a loan EMI calculator or using the EMI formula in excel. Though loan EMI calculations in excel could be a bit time-consuming, there’s no harm in learning the loan EMI formula.
This blog helps you understand how EMI is calculated in excel, its formula and factors that could affect your loan EMI. Let’s dive in.
An EMI calculator excel sheet applies the following formula.
=PMT(RATE,NPER,PV,FV,TYPE)
All you have to do is choose a cell and enter the formula to calculate EMI in excel.
In this formula,
Financial institutions use a simple EMI calculation formula to estimate the monthly payments to make towards a loan.
The formula is
EMI = (P X R/12) X [(1+R/12) ^N] / [(1+R/12) ^N-1]
In this EMI calculation formula,
P is the principal amount or the actual loan amount.
R is the rate of interest on the loan that you have applied for
N is the loan repayment tenure.
Suppose you have borrowed a loan amount of Rs.1 lakh for 12 months at a 10% p.a.. After applying the formula mentioned above, the EMI payable each month would be Rs.8,792.
However, calculating the EMI manually is a challenging task. You can request your loan provider to provide you with a detailed amortization chart or schedule. It includes important information like EMI payable, interest rate, tenure of repayment and the outstanding loan amount.
You will notice that the EMI amount gradually reduces as you make regular payments, and the principal amount also reduces. This information is essential if you plan to foreclose a loan.
You can go for alternative options like using online EMI calculators or applying the EMI calculation formula in excel. The latter comes in handy and lets you keep detailed accounts of your monthly installments.
Loan Amount
Rate of Interest (P.a)
%
Loan Tenure (Years)
Years
Monthly EMI
0
Total Interest
Total Amount
As you can see in the EMI calculator excel sheet, different variables must be considered when calculating the EMI. The EMI may increase or decrease depending on:
This is the principal amount on which you will be paying interest. The higher the loan amount, the higher the EMI.
When you use the EMI calculator excel, you have to enter the number of instalments or the tenure. The longer the tenure, the lesser the EMI. However, you will be making a higher payment towards the interest. Therefore, it is highly recommended that you try to repay the loan at the earliest.
The interest rate varies from one person to another. This depends upon several eligibility criteria, including income, credit score, the security provided, and more.
The margin amount or down payment is a part of the loan amount that the borrower must pay. The higher the margin, the lower the principal amount that the EMI is calculated on. Therefore, the total value of the EMI reduces.
Calculating the EMI beforehand will help you manage your current obligations and future finances accordingly. Evaluating the EMI estimate helps you to know your loan tenure as well. If you get an overall idea of how much you are required to pay every month, this will help you manage your finances and keep you away from the risk of defaulting. This, in turn, will ensure a good credit score in the long run.
You can easily calculate the EMI amount by using an online EMI calculator tool. Hence, know your EMI estimate beforehand to avoid any further complications.
Calculating your loan EMI in excel sheet could be useful, but it’s extremely time-consuming and labour intensive. Also, the chances of calculation errors are more in manual calculations.
This is where an online loan EMI calculator comes into the picture. It would help you save time and maintain accuracy while calculating loan EMIs
Ans. Amortisation is a process of scheduling EMI payments that offers a detailed calculation of how your loan is supposed to be paid over time. You can check how much is paid towards interest and capital payment in this schedule.
Ans. You can avoid complicated calculations and use an EMI calculator to do the work for you within seconds. This is a time-saving and hassle-free tool which gives accurate results.
Ans. No, pre-payment doesn’t reduce the EMI amount. It reduces the loan tenure. The prepaid amount reduces the principal amount outstanding, which in turn reduces the interest payable
Ans. If you miss your EMI payment for 3 consecutive months, most banks will give you a grace period. If you do not clear the EMI amount accumulated by this period, the bank will start charging you a penalty for late payment. This will significantly affect your credit score.
Ans. You can approach your lender to pause EMI payments for a few months if you come across any financial difficulties. Most lenders or banks provide a waiver of 3 to 6 months in EMI payments in such circumstances.
Looking for instant 🚀 personal loans 24*7 anywhere, anytime? Get personal loans up to ₹20 lakh starting at 9.9% p.a. Install the Navi app now!
Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
Personal Loans
How to Get Urgent Cash Loan without Documents Online in India?
An urgent cash loan without documents is a quick and easy solution for individuals in need of sudde... Read More »Personal Loans
What is a Cash Credit Loan and How to Apply for it?
What is a Cash Credit Loan? A cash credit loan is a short-term loan given to businesses to meet ... Read More »Personal Loans
How to Get Small Cash Loan on Aadhaar Card without PAN Card?
Small cash loans are loans offered by banks and NBFCs to meet short-term financial requirements. Th... Read More »Personal Loans
What is an Aadhaar Cash Loan and How to Apply for it?
Aadhaar Cash Loan Aadhaar cash loan is a financial service provided by banks and NBFCs (Non-bank... Read More »Personal Loans
Instant Loan without CIBIL Score
A good CIBIL score is necessary to avail of a loan on favourable terms and conditions. But, what ab... Read More »Personal Loans
What is a Top up Loan and How to Apply for It?
Understanding Top Up Loan A top up loan is an additional fund that you can avail above your exis... Read More »Personal Loans
Instant Personal Loan on Aadhar Card
As a taxpayer, you must have understood by now the role of PAN and Aadhaar while filing your income... Read More »Personal Loans
How to Get a Personal Loan without Income Proof?
When in sudden need for credit, both salaried and self-employed professionals can apply for a perso... Read More »Personal Loans
20 Best Personal Loan Apps in India 2023 – How to Apply ?
Personal loans can be used to fulfil any financial emergency, but getting them sanctioned can be a ... Read More »Personal Loans
How to Apply for EPF Loan Online?
Employees’ Provident Fund (EPF) aims to provide a financial cushion for salaried employees after ... Read More »Personal Loans
What are Short Term Loans? – Key Features and Benefits
The tenure for short term loans generally ranges from about a month to a year. They are usually uns... Read More »Personal Loans
Get Instant Cash Loan in 1 Hour Without Documents: Interest Rate and Eligibility
Are you in any emergency cash crisis and in need of an instant cash loan in 1 hour without document... Read More »Mutual Funds
Top 10 Chit Fund Schemes in India in 2023
Chit funds are one of the most popular return-generating saving schemes in India. It is a financial... Read More »Mutual Funds
10 Best Gold ETFs to Invest in India in February 2023
Gold ETFs or Gold Exchange Traded Funds are passively managed funds that track the price of physica... Read More »Mutual Funds
Top 10 Demat Accounts in India [Lowest Brokerage Charges]
A Demat account was created to eliminate the time-consuming and inconvenient procedure of purchasin... Read More »Mutual Funds
20 Best Index Funds in India to Invest in 2023 (Updated on 31st Jan)
What is an Index Fund? An index fund is a type of mutual fund or exchange-traded fund (ETF) that... Read More »Mutual Funds
Best Arbitrage Mutual Funds to Invest in India: Returns and Taxation
Arbitrage funds are hybrid mutual fund schemes that aim to make low-risk profits by buying and sell... Read More »Mutual Funds
Best SIP Mutual Funds To Invest In India (2023) – Its Types And Taxation
A Systematic Investment Plan (SIP) is a convenient way to invest a fixed sum in mutual funds. For i... Read More »Mutual Funds
10 Best Corporate Bond Funds in India 2023 – With Returns
Corporate bond funds are debt funds that invest at least 80% of the investment corpus in companies ... Read More »Banking
10 Best Banks for Savings Account in India (2023)
A savings account keeps your money safe, and lets you earn interest every quarter. There are many b... Read More »All information is subject to specific conditions | © 2023 Navi Technologies Ltd. All rights are reserved.
FEE FREE MONTH
No Processing Fee on Cash Loan