How to Calculate EMI on Your Home Loan

by Anvika aryaDecember 23, 2022

Planning ahead goes a long way in making your life smooth. The same applies to financial products. Your home loans run for a couple of years, so being sure how much you would have to pay monthly can help you repay your loan smoothly and enjoy your new home. 

Read on to find out how.

Table Of Contents

How To Calculate Your Loan EMI

Before you finalise your home loan amount or sign the agreement,  it is a good idea to get an estimate of the monthly EMI. 

Three aspects determine your loan EMIs; these are:


The principal is the actual loan amount you intend to take. The cost of the home minus the downpayment is the principal. 

If you want to buy a house worth Rs 60,00,00 and have saved Rs 20,00,000 for the down payment, then Rs 40,00,000 is your loan principal. The principal amount depends on home value, savings and the lender's policies. 

Lenders sanction 80-90% of the house value as a housing loan. Housing finance companies calculate instalments on the principal; the more you borrow, the higher your EMI.

Loan Term

The number of years or months you take the loan is known as the loan tenure. You can use the EMI calculator to check various loan duration options to evaluate if the monthly instalment fits your budget. 

A longer term means a smaller EMI with an overall high loan cost, and the converse is true if the tenure is short.

Interest Rate

The loan interest rate also influences your overall EMI. Interest rates are not something that is not in your control as the lenders decide the rate. 

However, you can compare various lenders to find one which offers you the lowest rates keeping other aspects in mind. Lower interest rates would reduce your EMIs. 

How To Calculate Your EMI With An EMI Calculator?

Home loan EMI calculator can help you estimate your EMIs. It is an online tool that helps you compute your monthly instalment for your loan. 

You enter the principal, loan term, and interest rate in the respective fields, and you will get your monthly instalment. 

You can adjust the principal and loan term amount and check the EMIs for a different combination. You can also change the interest with the help of a slider to estimate how any change in the rate will impact your EMI.

Benefits Of Using An EMI Calculator

Using a home loan interest calculator offers some benefits; we discuss a few below:

No Need For Manual Calculations

Manual calculation of your monthly instalment can be tedious, and mistakes can derail your decision-making. 

An EMI calculator comes in handy here and helps compare different tenures or rates easily. With the calculator, you can get accurate results instantaneously.

Finding The Best Deal Is Easier

A home loan interest calculator can help you find the best deal. Any change in the interest rate by even one-tenth of a per cent could make a difference to the overall loan cost and the monthly instalment. 

You can compare different lenders and decide which one to choose, considering factors like the overall difference in the loan interest and other expenses. 

Financial Planning

With an EMI calculator, you can plan your finances better. You know the exact amount you have to pay for the next 15-20 years as an EMI. 

This can help you budget your expenses, reduce your loan amount or increase your tenure, as the case may be.


Use an EMI calculator to compare loan offers from various housing finance companies and plan your finances better. Thorough research and a good understanding of any product help you make an informed choice and also save money. 

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