written by khatabook | November 21, 2022

How to Calculate Loan EMI using Excel Formula?

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A loan EMI calculator is a tool that helps you calculate the monthly installments that you need to pay towards repaying your loan. It considers the principal amount of the loan, interest rate, and tenure to give you an estimate of the EMI. This calculator is very useful in helping you plan your finances and budget for loan repayment. It is important to remember that the EMI is just an estimate, and the actual amount may differ slightly based on the interest rate charged by the lender. This calculator is important in helping you plan your finances and budget for loan repayment. 

Did You Know? The loan EMI calculator is a very helpful tool for anyone planning to take a loan. It is simple to use and estimates the monthly installment you will need to pay. 

What is a Loan EMI Calculator?

An EMI loan calculator is a tool that can be used to calculate the monthly repayments on loan. It can be used to calculate the repayments on a wide range of loans, including personal loans, car loans, home loans, and student loans. The calculator can be used to calculate the repayments for a range of different loan terms and interest rates. It can also be used to compare the repayments on different loans. 

The calculator is easy to use and only requires a few pieces of information, such as the loan amount, the interest rate, and the loan term. Once this information is entered, the calculator will calculate the monthly repayment amount. The calculator can be a useful tool for anyone considering taking out a loan. It can help to compare the repayments on different loans and to find the best deal. 

Also Read: How to Get Business Loans in Chennai - Eligibility & Application

Key Takeaways

The Loan EMI calculator is a simple, yet powerful tool to estimate your monthly loan repayment.  

  • It can help you estimate the monthly loan repayment for different types of loans.  
  • It is important to remember that the loan EMI calculator does not consider the interest rate.  
  • The loan EMI calculator can help you efficiently plan your monthly loan repayment. 

How to Use a Loan EMI Calculator in Excel? 

An EMI calculator is a simple mathematical formula that helps in calculating the equal monthly installments that need to be paid by a borrower to the lender till the completion of the loan tenure. The calculation of EMIs involves using key parameters like loan amount, loan tenure, and interest rate. Both individuals and organizations can use this calculator to calculate the EMIs for their loans. There are many online EMI calculators available which can be used to calculate the EMIs. 

However, if you want to use a loan EMI calculator in Excel, you can follow the steps given below. 

1. Download the EMI Calculator Template 

2. Enter the loan amount, loan tenure, and rate of interest in the respective fields 

3. The EMI will be calculated automatically  

4. You can also use the amortization schedule to know the breakup of interest and principal component of each EMI.  

5. You can also know the extra amount you will have to pay if you prepay your loan. 

Also Read: How to Get Business Loans in Mumbai? Types & Documentation

Things to Keep in Mind When Using a Loan EMI Calculator 

Here are some things to bear in mind when using a loan EMI calculator: 

1. The loan Amount And Interest Rate

The loan amount and interest rate are the two most essential factors when it comes to calculating the EMI. The loan amount is the principal amount that you have borrowed from a financial institution which you will be required to repay. The interest rate, on the other hand, is the percentage of the principal amount that you will be required to pay as interest on your loan. 

2. The Loan Tenure: 

The loan tenure is the period for which you have taken the loan. It is important to remember that the loan tenure will affect the EMI amount. The longer the loan tenure, the lower will be the EMI amount.  

3. The processing Fee: 

The processing fee is a one-time fee that is charged by the financial institution for processing your loan application. This fee is generally a percentage of the loan amount and needs to be factored in when using a loan EMI calculator. 

4. The Prepayment Charges: 

If you choose to prepay your loan before the end of the loan tenure, you will be required to pay a prepayment fee. This fee is generally a percentage of the outstanding loan amount and needs to be factored in when using a loan EMI calculator. 

Also Read: How to Get Business Loans for OPC Company? Check Eligibility & Application

The Benefits of Using a Loan EMI Calculator 

There are several benefits of using a loan EMI calculator. One of the biggest advantages is that it helps you calculate your monthly loan repayments in advance. This gives you a clear idea of how much you need to budget for your loan repayments and also helps you calculate if you can afford the loan in the first place.  

Another big advantage is that a loan EMI calculator can help you save money on your loan. By comparing different loan options side-by-side, you can ensure you’re getting the best deal possible. This can save you hundreds, or even thousands, of rupees over the life of your loan. 

Finally, a loan EMI calculator is a great way to keep track of your repayments. By inputting your loan amount, interest rate, and repayment period, you can see exactly how much you need to pay each month. This can help you stay on top of your repayments and ensure you don’t miss any payments. 

Factors Affecting EMI Amount 

The amount of EMI you pay every month depends upon several factors which include:

• The loan amount

• The tenure of the loan 

• The interest rate 

• The processing fee you pay 

• The prepayment charges 

Calculation of Loan in Excel 

In order to caluculate a loan in Excel,choose a cell in the Excel sheet and type the following formula there:

=PMT(RATE,NPER,PV,FV,TYPE)

Here, The rate refers to the loan's current interest rate.

The total amount of monthly payments or loan terms is referred to as the NPR.

Present Value, Loan Amount, and Principal Amount make up the acronym PV.

FV, or the cash amount after the final payment, stands for future value.

If this is left out, the value will be treated as zero (0).

Type 0 (numerical 0) or 1 designates the due date for the payment.

The type will be equal to zero if payment is due at the end of the period.

The type will be set to 1 if the payment is due at the beginning of the month.

Also Read: Types of Online Business Loan Scams & How to Be Safe Online

Conclusion

A loan EMI calculator is a useful tool that can help you calculate your monthly loan repayments. It is important to remember that the interest rate on your loan will affect the number of your monthly repayments. The loan EMI calculator can be found online and is very easy to use. Simply enter the loan amount, interest rate, and loan tenure into the calculator, which will give you the monthly repayment amount. 

It is important to compare different loans before taking one out. The loan EMI calculator can help you compare different loans and choose the best one. Remember to factor in the interest rate when taking out a loan. The loan EMI calculator can help you calculate your monthly repayments to budget accordingly. 
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FAQs

Q: How do I calculate a loan payment formula in Excel?

Ans:

You can use the PMT function to calculate a loan payment formula in Excel. This function will calculate the monthly payment for a loan based on its interest rate, number of payments, and principal amount.

Q: How do I calculate loan interest?

Ans:

To calculate loan interest, you can use the RATE function. This function takes the loan amount, EMI, and loan tenure as inputs and returns the interest rate.

Q: How do I calculate loan repayment in Excel?

Ans:

To calculate loan repayment in Excel, you can use the PMT function. This function takes the following arguments: rate - the interest rate per period per - the total number of payments PV - the present value of the loan fv - the future value of the loan type - the type of loan (0 for a standard loan, 1 for a balloon loan)

Q: How do I calculate loan EMI in Excel?

Ans:

To calculate loan EMI in Excel, you can use the PMT function. This function takes the following arguments: rate - the interest rate per period per - the total number of payments PV - the present value of the loan fv - the future value of the loan type - the type of loan (0 for a standard loan, 1 for a balloon loan) 

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.