Hello, Everyone Do you wants to know How to calculate loan amount with EMI? so today you are at the right place , Today in this article We will discuss :-
How to Calculate loan amount with EMI?
To calculate the loan amount with EMI, you will need to use a formula that takes into account the loan tenure, interest rate, and monthly EMI payment.
The formula to calculate loan amount with EMI is:
Loan Amount = (EMI x (1 + r)^n – 1) / (r x (1 + r)^n)
Where, EMI = Equated Monthly Installment r = Rate of Interest per month (calculated as annual rate/12) n = Loan Tenure in months
To calculate the EMI, you can use the following formula:
EMI = [P x r x (1 + r)^n] / [(1 + r)^n – 1]
Where, P = Loan amount r = Rate of Interest per month (calculated as annual rate/12) n = Loan Tenure in months
Using these two formulas, you can calculate the loan amount given the EMI or the EMI given the loan amount, tenure, and interest rate. It is important to note that the loan amount calculated using these formulas may differ slightly from the actual loan amount due to rounding off and other factors.
FAQ
What is loan?
It is contract of financial services between a lender and borrower. In this arrangement, the lender offers the borrower the amount and the borrower is required to repay by paying interest for a specific time. The loan can be secured or unsecure in accordance with the collateral provided by the borrower or not.
Secured loans are secured by collateral, like cars, houses or other property that is owned by the loanee. If the borrower is unable to pay the loan back the lender may take the collateral and recover the balance. Secured loans generally offer lower rates of interest than loans that are not secured, since collateral decreases the risk of lending.
Unsecured loans, on other hand, don’t require collateral, and are dependent on the creditworthiness of the borrower and capacity to repay the loan. They typically come with higher rates of interest than secured loans because the lender has to take on greater risk.
They can be used to fund a myriad of reasons for example, purchasing a house or a car, financing the growth of a company, or to pay for medical or educational expenses. Different kinds of loans have distinct terms and conditions including the rate of interest and repayment period as well as other charges and fees.
It is essential for borrowers to take a close look at the terms of the loan prior to signing the contract and to be sure that they can be able to pay for the loan. A loan default can be a serious issue, resulting in damages to the credit score, legal actions and even the seizure of assets in the event for secured loan.
What is EMI?
EMI is an acronym is Equated Monthly Installment. This is a set amount of money that is paid by the borrower to a lender each month to repay an loan. The EMI comprises the principal amount in addition to the interest that is charged on the loan. it is calculated on the amount of loan as well as the interest rate and loan duration.
The EMI remains the same throughout the loan repayment duration however, the percentage of principal and interest of every EMI is altered as the loan advances. In the initial phase of loan more of the EMI goes to paying interest, whereas towards the close of the loan more of the EMI is used for repaying the principal amount.
The term “EMI” is commonly used as a phrase in relation to mortgages, car loans, personal loans as well as other types of loans. The lenders typically offer borrowers an amortization schedule which outlines what is included in each EMI into its interest and principal components in addition to the balance of loans remaining at the conclusion the EMI payment.
