EMI Comparison Calculator

What is an EMI:

EMI (Equated Monthly Installment) is one part of the equally divided monthly amount a borrower pays to the bank or organization they have taken the loan from for a fixed tenure.

How to use this Calculator

With this calculator, not only can you calculate your monthly EMI's, but you can also compare the differences between offers of two different bank/Financial institutions.
To use the calculator, you can follow these simple steps:

• Input the amount for which you're planning to take the loan for
• Input the number of months for which you're planning to take the loan for.
• You may opt for a certain Down-payment( like when you buy your dream house ). Put in whatever amount you're planning to pay upfront. This is optional so you may choose to put '0' as well.
• Put in the interest rate the first company is offering you.
• Put in the interest rate the second company is offering you.
• Click the button to get the results in a simple yet informative tabular form.

What affects your EMI:

The amount of EMI depends on various factors:

1. Principal amount: The total amount that is borrowed from the financial institute.
2. Interest rate: The rate at which the financial institute is offering the borrower the principal amount. Higher the interest rate higher is the EMI that needs to be paid back.
3. Loan term: The total duration in which the principal amount and the interest component needs to be paid back to the financial institute.
4. Repo rate: The rate at which the financial institute borrows money from the central bank. If central bank charges a higher interest rate bank increase their interest rates as well ultimately increasing the total amount of EMI.

EMI and your Bank:

For a fixed interest rate the EMI remains fixed provided the total amount is paid within the given period. Financial institutes prefer collecting most of the interest component payment in first half of the tenure. The first EMI has the highest interest component and lowest and principal component whereas the last EMI has the lowest interest component and the highest principal component. In case a person is able to make pre-payments either the tenure of the loan gets reduced or the amount of EMI reduces or a mixture of both. The scenario reverses if the borrower is not able to pay EMI on time. In case of inflation the central bank charges a higher repo rate to discourage financial institutes from borrowing money from center and further lending it to the people. This helps in reducing the supply of money and bringing down the inflation rate. On the other hand, whenever there is a deflation central bank decreases the repo rate making the interest rates at which financial institutes end money less thus, increasing the supply of money as more people borrow at lower interest rates.