EMI stands for Equated Monthly Installment. It is a fixed amount that a borrower pays to the lender at a specified date each calendar month. EMIs are used to repay both the principal amount and the interest on a loan, ensuring that the loan is paid off in full over the agreed-upon tenure.

The formula for EMI is given by:

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

where –

• P is the principal amount
• R is the rate of interest
• N is the loan tenure

The major components of a EMI ( Equated Monthly Installment) include:

1. Loan Amount: Any individual can easily enter the principal amount in the loan amount text box.
2. Tenure: The time period under which an individual will repay the complete amount apart from EMIs.
3. Rate of Interest: The chargeable interest amount. The rate of interest is variable depending on the bank or finance provider.
4. Home Loan EMI: An amount that the borrower is accountable to pay every month to the lender. The Urban Money home loan EMI calculator will help the borrower to know how much amount is affordable.
5. Payment Breakup: The breakdown of the principal amount and interest is liable to pay at the end of the loan tenure.
6. Amortisation Schedule: After deduction, the remaining amount to be paid towards an outstanding home loan. It also displays the loan repayments, loan amount, and the time frame of scheduled payments, along with the remaining loan.

An EMI (Equated Monthly Installment) calculator is a tool used to calculate the fixed monthly payment amount that a borrower needs to pay towards a loan. It takes into account the loan amount, interest rate, and loan tenure to determine the EMI.

The formula for EMI involves the loan amount, interest rate, and loan tenure, and it helps borrowers plan their budget by giving them a clear idea of the monthly financial commitment. Using an EMI calculator can be quite handy when considering various loan options and understanding the financial implications of different terms and interest rates.