The home loan is a long-form of debt which usually lasts for at least two decades until the entire principal and interest amount are not paid. Since it is most probably the biggest loan most people would ever avail, thus it becomes crucial to ascertain the financials and affordability before availing the loan. You need to be absolutely comfortable with the portion of income that the EMI would consume year after year. Therefore, to help you in understanding this possible situation, you can take the help of an online free tool known as a home loan EMI calculator. It’s available for free on most of the lender’s websites for unlimited usage. 

Home Loan Calculator

A home loan calculator is an online free tool that helps in calculating the EMI of the home loan along with the principal and interest portion in each EMI based on the loan amount, interest type, rate of interest, and tenure. You can use the tool with various permutations and combinations to deeply analyze which scenario will best fit your needs. 

Different EMI Methods

The EMI is the set amount that you have to pay each month in order to repay the availed loan over a period of time. It consists of both interest and principal portion. The Equated Monthly Installment (EMI) can be calculated in two different ways; flat interest rate and reducing the balance interest rate. 

In the case of a flat interest rate method, the interest amount is calculated on the original loan amount throughout the tenure. This means that the interest amount remains the same for each month. The formula for calculating EMI under this method is – 

EMI = (Principal+Interest)/Period in months.

On the other hand, in the case of the reducing-balance interest rate method, the interest is calculated on the remaining outstanding balance each month. In this way, each month, the interest portion keeps on reducing, and the principal portion keeps on increasing in the EMI. 

The formula for calculating EMI as per the reducing balance method is – 

EMI = [P x R x (1+R)^N]/[{(1+R)^N}-1]

Here, P is the Principal amount; R is the rate of interest, and T is the tenure of the loan in months. 

How the Calculator Works

To calculate the EMI of your home loan through a home loan calculator, you need to enter the values or use the slider provided in the calculator to enter the principal amount (P), rate of interest (R), and loan duration (T). Some lenders provide both a slider and the option of entering the value manually, while on some websites the slider is for just the interest rate or tenure along with a manual option to enter the values. 

After entering all the required values, click on ‘calculate’ and it will show you the complete information on EMI for each month throughout the tenure along with the interest and principal portion. 


Some key benefits of calculating the EMI of your house loan through home loan calculator are: 

  1. First and foremost, the calculator saves you the trouble of doing the complex and long calculation manually. 
  2. The results you get from the home loan calculator are accurate for the whole period. Thus, you can easily know the number of finance charges you would have to bear. 
  3. With the help of a calculator, you can compare the effect of various interest rates, loan amounts, and tenure and assess how it will impact your financials. Based on the results, you can plan your finances to put yourself in the best position possible. 

You can find the home loan calculator on the website of most lenders and also on various fintech websites. You can choose any platform which suits you best. 

Read more about Home Loan EMI Calculator & Interest Rates


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