Apart from the online calculators, EMI calculators can also be configured in an Excel sheet. To do this you will need to know the formula that makes an EMI calculator works and also how to use formulae in excel sheets. The one disadvantage of the excel sheet calculator is that you need to know how to configure it and also need to input the interest rate after calculating the monthly rates. It also does not take into account the processing fee. By contrast, the online EMI calculator can take the interest rates as annual rates and convert them to monthly rates on its own. It can also include the processing fee and other smaller features like prepayments.
Calculating the EMI for your loan is crucial to determine whether it matches your repayment capability or not. Applying for a loan that exceeds your ability to repay the debt can lead to the rejection of your application. If you apply for a loan wherein the EMI is equal to your maximum repayment ability, your chances of defaulting severely increases. In case you are not able to check your EMI using an online EMI calculator, you can also do the same using an Excel spreadsheet. All you need to do is use the PMT function to calculate your monthly installments. The syntax for the excel function is:
PMT (rate, nper, pv)
pv = The principal amount or the present value
rate = The fixed rate of interest at which the loan is borrowed
nper = The number of payments to be made to repay the entire debt
The mathematical formula for calculating EMI = [P x R x (1+R) ^n] / [(1+R)^ n-1]. (P is the principal loan amount, R rate of interest per month and N is the the number of monthly instalments). Manual calculations are too complicated to perform accurately, which is why many borrowers are left confused after availing a loan. Understanding this pain-point led BankBazaar to develop one of the easiest and most user-friendly online Loan EMI Calculators.