A Personal Loan Equated Monthly Installment (EMI) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. EMIs are applied to both interest and principal each month, so that over a specified number of years, the loan is paid off in full.
How the EMI Calculation Works
The mathematical formula used by this calculator to derive the monthly payment is:
E = P x r x (1+r)^n / ((1+r)^n – 1)
E is the EMI (Monthly Installment)
P is the Principal Loan Amount
r is the monthly interest rate (Annual Rate / 12 / 100)
n is the loan tenure in months (Years * 12)
Example Scenario
If you borrow $10,000 for a period of 3 years at an annual interest rate of 12%:
EMI = [10,000 x 0.01 x (1+0.01)^36] / [(1+0.01)^36 – 1] = $332.14
Total Interest = ($332.14 * 36) – $10,000 = $1,957.15
Factors That Affect Your Loan EMI
Several variables determine how much you will pay every month for your personal loan:
Principal Amount: The higher the loan amount you borrow, the higher your monthly EMI will be.
Interest Rate: Higher interest rates lead to higher EMIs and significantly more interest paid over the life of the loan.
Loan Tenure: Choosing a longer tenure reduces the monthly EMI amount but increases the total interest burden. Conversely, a shorter tenure increases the EMI but saves you money on interest.
function calculateLoanEMI() {
var principal = parseFloat(document.getElementById('loanAmount').value);
var annualRate = parseFloat(document.getElementById('interestRate').value);
var years = parseFloat(document.getElementById('loanTenure').value);
if (isNaN(principal) || isNaN(annualRate) || isNaN(years) || principal <= 0 || annualRate <= 0 || years <= 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
var monthlyRate = annualRate / 12 / 100;
var totalMonths = years * 12;
// EMI formula: P * r * (1+r)^n / ((1+r)^n – 1)
var emi = (principal * monthlyRate * Math.pow(1 + monthlyRate, totalMonths)) / (Math.pow(1 + monthlyRate, totalMonths) – 1);
var totalAmount = emi * totalMonths;
var totalInterest = totalAmount – principal;
document.getElementById('resEmi').innerText = '$' + emi.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resInterest').innerText = '$' + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTotal').innerText = '$' + totalAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('loanResult').style.display = 'block';
}