EMI Calculator

EMI Calculator


Monthly Payment (EMI): NPR 0

To take advantage of any retail loans provided by lending organizations, you must pay an EMI or equated monthly installment. However, it might be challenging to calculate how much you can truly spend.

Borrowers may use an EMI calculator to estimate their monthly loan payments based on the loan’s principal, interest rate, term, and other variables. In this article, we’ll learn about EMI calculators in further detail, explaining how they work and why they’re essential for making wise financial decisions.


What is an EMI (Equated Monthly Installment )?

Equated monthly installments (EMIs) are set payments made by a borrower to a lender on a particular day each month. To pay off the loan in full over a certain number of years, equal monthly installments are applied to the principal and interest each month. The borrower pays regular monthly payments to the lender over several years to pay off the loan in the most popular loan forms, including mortgages on real estate, vehicle loans, and school loans.

How is EMI Calculated?

EMI may be calculated using either the flat-rate technique or the reducing-balance (or reduce-balance) method. Both incorporate the loan principal, loan interest rate, and loan duration into their computations.

Equated Monthly Installment (EMI) Formula

EMI=  P x R x (1+R)^N / [(1+R)^N-1] 


EMI = Equated Monthly Installment

P = Principal Loan Amount (the amount you borrow)

R = Monthly Interest Rate (annual interest rate / 12 months /100)

N = Loan Tenure (number of monthly installments)

Example: Suppose you’re planning to take a home loan of NPR 2,000,000 with an annual interest rate of 10.5%, and you want to repay it over 5 years (60 months).

First, convert the annual interest rate to a monthly rate by dividing it by 12 and dividing it by 100 to convert it from a percentage to a decimal value.

R = (10.5 / 100) / 12 = 0.00875

P = NPR 2,000,000

N = 60 (since you’re replaying it over 5 years)

Now, you have all the values needed for the calculation, Using the formula

EMI= P x R x (1+R)^N / [(1+R)^N-1] 

We get,

EMI = [2,000,000 x 0.00875 x (1 + 0.00875)^60] / [(1 + 0.00875)^60 – 1]

EMI ≈ [2,000,000 x 0.00875 x (1.00875)^60] / [(1.00875)^60 – 1]

EMI ≈ [2,000,000 x 0.00875 x 1.644238] / 1.644238 – 1]

EMI ≈ [28,284.76] / 0.644238

EMI ≈ NPR 43,997.54 (rounded to the nearest rupee)

So, in this example, the EMI for a home loan of NPR 2,000,000 at an annual interest rate of 10.5%, with a tenure of 60 months, would be approximately NPR 43,998 per month.

What is an EMI Calculator?

A financial tool that makes it easier to figure out your monthly installment payments is the EMI calculator. An EMI calculator may help you determine how much you will need to pay each month whether you are taking out a personal loan, auto loan, or house loan. Budgeting is made simpler as a result, and you may evaluate different loan offers from different financial institutions in Nepal.

How Does EMI cal work?

EMI calculators commonly need three essential pieces of information:

  • Loan Amount: The total amount you plan to borrow.
  • Interest Rate: The annual interest rate offered by the lender.
  • Loan Tenure: The number of months or years over which you plan to repay the loan.

Once you input these details, the EMI calculator performs a complex mathematical formula to give you the exact EMI amount you’ll need to pay each month. It considers both the principal amount (the original loan amount) and the interest accrued over the repayment period.

Why use an EMI calculator?

  • Financial Planning: Effective financial planning is made possible with EMI calculators. To see how changing the loan amount, term, or interest rate impacts your monthly EMI, make the necessary changes. This enables you to select a loan choice that matches your spending limit.
  •  Comparisons: With so many financial institutions in Nepal offering loans, comparing loan offers from several banks or lenders is made easy with the use of an EMI calculator. This guarantees that you receive the best possible deal.
  • Transparency: EMI calculators provide you with full disclosure of the cost of borrowing. You can see how much of each EMI payment is used to interest and how much is applied to the principle.
  • Making Quick Judgments: You may make well-informed judgments without wasting time by swiftly calculating EMIs for various scenarios.
  • Avoiding Financial Stress: By improving your financial management and lowering your chance of loan default, knowing your monthly EMI may help you avoid financial stress.

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How is my EMI calculated?

The formula to calculate EMI is P x R x (1+R)^N / [(1+R)^N-1] – where, “P” is the principal loan amount, “N” in tenure in months, and “R” is the prevailing interest rate.

Is EMI interest monthly or yearly?

The rate of interest will be taken as a monthly rate as EMIs are paid monthly. Therefore, if the interest rate is 10%, you need to divide it by 12. Also, the tenure will be the number of months. So, if your loan tenure is 20 years, the tenure will be 20×12 = 240 months.

Is EMI good or bad?

Although a good EMI scheme is easy on your wallet, you must try to avoid it as the first option. You may not only be spending more than the actual worth of the product but also splurging first and then relying on EMI payments is not healthy for your finances.

Is EMI better than a loan?

EMI is inherently neither good nor bad. EMI provides you with the convenience of repaying the loan in comfortable and easy installments. However, you cannot ignore the fact that through EMIs, you are paying more than you borrowed. The costs such as interest and processing fees are added to it.

Is EMI costly?

EMI cost depends on the loan amount, interest rate, and tenure. Higher loan amounts and longer tenures result in lower monthly EMIs but potentially higher overall interest payments, making it costlier in the long run.


EMI calculators are essential tools for anybody thinking about taking out a loan in Nepal. They enable borrowers to manage their budgets, make wise financial decisions, and select the loan option that best meets their requirements. Understanding and employing an EMI calculator will help you realize your financial goals while maintaining your financial security, whether purchasing a home, a car, or any other item. Use an EMI calculator to help you navigate your financial trip the next time you set out on one.

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