# What is EMI ? How to Calculate EMI ? - Equated Monthly Instalment

EMIs are Equated Monthly Instalment EMI Formula in Excel, How to Calculate EMI Balance, EMI Formula Derivation, EMI full form, How to Pay EMI Balance Online.
What is EMI? -- The full form of EMI is Equated Monthly Installment - EMI for short - is the amount payable every month to the bank or any other financial institution until the loan amount is fully paid off. It consists of the interest on loan as well as part of the principal amount to be repaid.

The sum of principal amount and interest is divided by the tenure, i.e., number of months, in which the loan has to be repaid. This amount has to be paid monthly. The interest component of the EMI would be larger during the initial months and gradually reduce with each payment.

The exact percentage allocated towards payment of the principal depends on the interest rate. Even though your monthly EMI payment won't change, the proportion of principal and interest components will change with time. With each successive payment, you'll pay more towards the principal and less in interest.

How to Calculate EMI ?

Loan calculators are nothing but a way to calculate the amount of money to be paid to the lender on a monthly basis with the given interest rate and the period for which it is taken. The loan amount can be calculated with the help of a formula, however, this is least preferred as now technology as developed to a very great extent and one can have an access to the online loan calculator.

When calculating the loan amount manually the formula that is used is mentioned below & Enter the following information in the EMI Calculator:
• Price - Total Amount Of Your Home/ Car etc
• Deposit - Advance Amount Deposited As Down Payment if No Then Fill- 0
• Loan term in (Years)
• Rate of interest (Percentage)
While doing it online, one just need to feed in all the figures and click a button called “calculate” which then calculates and gives the monthly payment amount. Online loan calculators are preferred more than the manual calculation because the possibility of error making is lesser or nil while doing it in calculators.