# Everything You Need to Know about an EMI Calculator

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An EMI calculator is used to calculate the monthly amount that one needs to pay towards a loan. In other words, an EMI calculator provides you with a clear idea of the amount you require to pay on a monthly basis in the form of EMI to clear your loan. EMI stands for Equated Monthly Installment. The appropriate definition of EMI is the total interest amount and principal amount divided by the entire tenure, that is, the number of months in which the loan has to be refunded to the banker. The formula to calculate EMI is:

EMI = [P*R*(1+R) ^N / [(1+R) ^N-1]; where E= EMI, P= Principal loan amount, N = Loan tenure period and R= Rate of interest per month.

###### Now, let’s discuss all these factors in detail.
• Principal amount

The principal amount is the amount that a person has borrowed from a bank. This amount directly affects your EMIs. It is the loan amount provided by the bank on which the interest will be calculated.

• Interest rate

The interest rate is the rate at which the interest is charged on the amount borrowed. It is the percentage of the principal amount which is taken as a loan.

• Tenure period

The tenure period is the duration of time within which you have to repay the loan. A shorter tenure increases your EMI amount, and a longer one makes the EMI amount smaller.

The interest component of EMI is higher during the initial period; it gradually decreases with the passing years as more and more qr code payment is made.

###### Advantages of using an EMI calculator include help with adjusting the monthly budget, a good credit rating, accurate results, and ease of access.

The credit card EMI calculator tool helps you calculate the interest rate and monthly EMI on your credit card. Before taking a loan, you have to know about the EMI amount that you are required to pay every month. Use the Credit card EMI calculator to calculate the monthly amount that you are required to pay against your repayment of the loan, based on the transaction amount, interest rate, and loan term. You can find this calculator on any website that lends money online.

A credit card is essential for calculating an EMI. But for a new customer, you have to calculate EMI without a credit card. The steps that you should follow are: 