Equated Monthly Installments (EMIs) is the credit mechanism or instrument employed by financial institutions as the repayment schedule for a loan availed to a borrower.
EMI divides the entire corpus payable into equal installments. A borrower needs to pay a fixed amount of EMI every calendar month over the repayment period of the loan, also known as the loan tenure. An EMI comprises of both principal and interest components. This facility makes loan availability more convenient and accessible for borrowers.
EMIs are applicable across all forms of loan, i.e. personal loans, home loans, business loans, car loans, etc. The EMI amount is calculated based on – loan amount, repayment tenure, and rate of interest. You can calculate your EMI using anAxis Bank EMI calculator.
What are the advantages of an EMI calculator from Axis Bank?
Axis Bank is the 4th largest private sector bank in India in terms of market capitalisation. It offers a wide array of financial services and products and is renowned for its state-of-the-art facilities.
It has played an essential role in improving the credit market in India. It offers loans which come with affordable interest rates and convenient repayment tenures to help borrowers spread the financial weightage of a loan across EMIs as per your affordability and convenience.
TheAxis Bank loan calculatorcan offer significant advantages when availing a loan. These are –
- Accurate calculation:It provides you with the exact EMI figure based on the loan amount, interest rate and repayment tenure you have input.
- Helps in making a decision:TheAxis EMI calculatorhelps you in making decisions regarding EMI determinants, i.e. loan amount and repayment tenure. You can provide different combinations of those factors to gauge the EMI which you find in line with your affordability and convenience.
- Time-saving:TheAxis Bank EMI calculatoris far more efficient compared to manual calculation. It helps you save time on EMI calculation and helps you reach a decision faster.
- Mobility:You can access theAxis bank loan calculatorthrough multiple devices such as cell phones, personal computers, tablets, thus allowing you to calculate your EMI at anytime, anywhere.
How does the Axis Bank Loan EMI Calculator work?
An EMI calculator integrates the following formula into its functioning –
EMI = [P * R * (1 + R) ^ N] / [(1 + R) ^ (N – 1)]
The variables of the formula are mentioned below –
- P represents the principal amount or the loan amount.
- R represents the interest rate.
- N represents the repayment period in months.
Example:Mr. B applies for a housing loan for Rs. 35 Lakh on the 1st of April at an interest rate of 8.9%. The repayment tenure of the loan is settled at 25 years or 300 months.
Therefore, EMI = [(35000000 * 0.089 * (1 + 0.089) ^ 300) / [(1 + 0.089) ^ (300 – 1)]
Or, EMI = Rs. 23,133.
You can calculate the same using anAxis EMI calculator.
What is Amortisation Schedule?
The amortisation schedule is a table which contains data which are relevant to the loan. These data include –
The following table shows the amortisation schedule of the example stated above.
| Number of Months | Principal (Rs.) | Interest (Rs.) | EMI (Interest + Principal) | Balance (Rs.) |
|---|---|---|---|---|
| 1 | 3,174 | 25,958 | 29,133 | 3,496,826 |
| 2 | 3,198 | 25,935 | 29,133 | 3,493,628 |
| 3 | 3,221 | 25,911 | 29,133 | 3,490,406 |
| 4 | 3,245 | 25,887 | 29,133 | 3,487,161 |
| 5 | 3,269 | 25,863 | 29,133 | 3,493,892 |
| 6 | 3,294 | 25,839 | 29,133 | 3,480,598 |
| 7 | 3,318 | 25,814 | 29,133 | 2,477,280 |
| 8 | 3,343 | 25,790 | 29,133 | 3,473,937 |
| 9 | 3,368 | 25,765 | 29,133 | 3,470,570 |
| 10 | 3,393 | 25,740 | 29,133 | 3,467,177 |
| 11 | 3,418 | 25,715 | 29,133 | 3,463,759 |
| 12 | 3,443 | 25,690 | 29,133 | 3,460,316 |
| 13 | 3,469 | 25,664 | 29,133 | 3,456,848 |
| 14 | 3,494 | 25,638 | 29,133 | 3,453,353 |
| 15 | 3,520 | 25,612 | 29,133 | 3,449,833 |
The principal component is significantly lower compared to the interest component during the initial years. In the later years, the principal amount exceeds the interest amount.
Benefits of BhuMe Axis Bank Loan EMI calculator
The benefits of BhuMe’s EMI calculator are as follows –
EMI calculation is a crucial task when applying for a loan. Based on your affordability, you can decide the scale of your EMI. Shorter repayment tenure attracts larger EMIs; however, the total interest payable significantly reduces. On the other hand longer tenure leads to lower EMIs but increases the total interest payable substantially. Therefore, you need to carefully assess your expenses and income and calculate the EMIs with the help of calculators like the BhuMe orAxis Bank EMI calculatorto decide which principal-tenure combination would ideally complement your credit requirement and affordability.