How to calculate Home Loan EMI and Outstanding Balance
Today every other person dreams about having home of his own, but the way real estate prices piercing through sky and common mans pocket its highly impossible to fulfill this dream without support of Loan. Home Loan, which is available easily and simply a phone call away. You simply need to fill in few forms, provides some proof and your are ready to get your home loan. Banks even have different schemes of tailored loans to suit the need of its customer. But the person who avails the loan, he knows, getting loan is easy but keep on paying the EMI is tough and inevitable task. Through this article I would like to introduce 2 of small utilities related to home loan that I think can be useful to all home loan customers. Every customer wants to know what EMI he will be paying to for particular amount of loan for given period and interest rates. Also he will be interested in outstanding balance or you can say principal amount remaining after paying up few installments. These utilities will help you to know the exactly same.
In these utilities I have simply used the formula that is readily available on net to calculate EMI and reversed it to get outstanding balance. The formula is 
Where, E = EMI P = Principal Amount r = Monthly Interest rate (if 10.5 % is annual rate then monthly rate = 10.5/12/100 ) n = No of terms loan opted for. Now while calculating outstanding balance, I need to calculate P on the basis of E, r and n which is remaining term in this case, that means if you have opted for 10 years (120 months) loan and paid 20 EMI then n would be 100. Go on and give this tools a try, If you think they are not correct, please send me your comments and I will do my best to correct it.
I have tried ot in excel,
& compared with result get from online claculator it is not matching.
Example,
Principle amount 20,000.00
rate of Interest 18.25% p.a. (monthly reducing)
Period on loan 4 years
EIM paid so far 12 nos
AS per mentioed formula principle amound paid is coming 68,281.00
I have excel I can share
revert
Hi Mahendra,
Glad you tried this. But it seems there’s some kind of mistake while you entered values and checked the output.
According to you, you have 20,000 loan amount with interest rate of 18.25% for period of 4 years (48 Months). If I put these values in the EMI calculator, the EMI comes around Rs. 590 (approx). In Next part, you saying that, you have paid 12 EMIs that means remaining balance term would be 36 Months. Now if I put this balance term(36), emi(590), and interest rate(18.25) in the outstanding balance calculator the remaining balance comes 16263 (approx).
Request you to re-check the tool again.
Once again thanks for giving this utility a try.
– Pavan