4 Replies to “How EMI calculated in bank loan?”

  1. 100000 x 12% = 12000 x0.6 = 7200
    100000 + 7200 = 107200/12 = 8935 Approximately
    When you pay the EMIs regularly the last EMI will be less and in a diminishing manner
    they calculate and adjust the same to your loan account


  2. let us make calculations simpler.
    loan amount = 12000
    tenure = 1 year = 12 emi
    rate of interest = 12% = 1% per month
    month of borrowing = dec.
    1 emi due in jan
    2 emi due in feb
    12 emi due in dec.
    in jan 12000/12(=1000) +120 =1120
    in feb 12000/12(=1000) +110 =1110
    in feb 12000/12(=1000) +10 =1010
    so total interest =120+110+100+90 …..10 = 780
    which means 12000+780 = 12780 need to be paid to close the loan account.
    120780/12 = 1065 is the EMI
    for ready use the link is given below.


  3. In most loans interest is calculated on a daily basis and posted monthly. For Rs.100000/- @12% for one year–
    100000X12% =100000X.12=12000
    Principal + Interest=112000/-
    If your tenure of loan is 12 months EMI=112000/12=9333.33=9334/-appx
    In this example it is assumed that there are no charges like processing charge, closing charge, charges for notice to the loaned etc.Interest is calculated annually.
    To calculate on monthly basis use the formula A= P(1+r/100)raised to n times
    —————-
    n

    A= the total principal + interest at the end of n years and r is the rate of interest.






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