# Create Home Loan EMI Calculator in Excel Sheet with Prepayment Option

In this article, we will learn to create a home loan EMI calculator with a prepayment option in an Excel sheet. Many people take home loans while buying their house and they can track the loan with an EMI calculator very easily. Today, we will demonstrate step-by-step procedures to make a home loan EMI calculator with the prepayment option. So, without any delay, let’s start the discussion.

You can download the home loan EMI with the prepayment option calculator from here.

## What Is Home Loan EMI?

The EMI stands for Equated Monthly Installment. EMI is the amount of money that you need to pay for the home loan you have taken. The formula of EMI can be written as:

`EMI=[PxRx(1+R)^N]/[(1+R)^N-1]`

Here,

• P = Principal Amount
• R = Rate of Interest
• N = Repayment Periods (Total Number of Months)

So, we can see that EMI depends on the interest rate (R), tenure years (for how many years you will take the loan(N)), and also on your income.

The EMI has two main parts: Principal Amount and Interest Amount. The principal amount is less initially but increases with tenure. And the interest amount is high at the beginning and decreases with time. For this reason, you should try to make pre-payments during the initial months.

## Step-by-Step Procedures to Make Home Loan Calculator in Excel Sheet with Prepayment Option

### STEP 1: Create Dataset for Home Loan EMI

• First of all, you need to create a dataset.
• In the dataset, create a section for Principal, Interest %, and Tenure in Years.
• After that, create columns for Months, EMI, Principal, Interest, Principal Remaining, and Pre-Payments like the picture below. • Also, create a section for all the total amounts including Total Interest, Updated Interest, Total Amount, Total Savings, and Updated Amount. ### STEP 2: Insert Home Loan with Interest

• Secondly, type the amount of the loan in Cell C4, the percentage of interest in Cell E4, and tenure in years in Cell G4.
• In our case, the home loan is \$4,000,000, interest is 7%, and tenure is 20 years. Note: The Interest Rate should be in the Percentage Number Format.

### STEP 3: Fill Down Months and Principal Remaining Amount

• In the third step, we will fill down the Months column at first and then, the Principal Remaining Amount.
• We need to enter 20*12 = 240 months in our sheet starting from 0. Here, 20 is the Tenure in Years.
• To fill down months, select B7 and type 0.
• After that, drag the Fill Handle down to Cell B246. • In the following step, select Cell F7 and type:
`=C4`
• Press Enter to see the result.
• It will show the value of Cell C4 which is \$4,000,000. ### STEP 4: Apply Necessary Formulas in Dataset

• In the fourth step, we need to apply the necessary formula in the dataset.
• First of all, we will apply the EMI formula.
• For that purpose, select Cell C7 and type the formula below:
`=ABS(PMT(E4/12,G4*12-B7,F7))` In this formula, we have used the PMT function to calculate the EMI. Also, took the absolute value of this result with the ABS function.

• The first argument (E4/12) is the Monthly Interest Rate.
• The second argument (G4*12-B7) denotes the Number of Months Remaining.
• And the third argument (F7) represents the Remaining Principal Amount.
• Hit Enter to see the result. • After that, select Cell E7 and type the formula of Interest amount:
`=\$E\$4/12*F7` In this formula, we have divided the Yearly Interest Rate by 12 to get the Monthly Interest Rate. And then, multiplied it by the Remaining Principal Amount to get the Interest Amount.

• Press Enter to see the result. • To find the Principal amount, type the below formula in Cell D7:
`=C7-E7` • Again, hit Enter to see the result. • Now, to calculate the Principal Remaining, type the below formula in Cell F8:
`=F7-D7-G8` To get the Remaining Principal Amount, you need to subtract the Pre-Payments and Paid Principal from the Previous Remaining Principal.

• Once again, press Enter to see the result. • The EMI will be fixed for the rest of the months.
• So, type the formula below in Cell C8:
`=\$C\$7` ### STEP 5: Use Fill Handle to Complete Dataset

• After inserting the formulas, we need to apply them to the whole sheet.
• To do so, select Cell C8 and put the cursor on the bottom right side of the cell.
• The cursor will change into a small black plus (+) sign.
• Double-click on the small black plus (+) sign or drag it down to Cell C246. • You need to repeat the same procedure for the rest of the formulas. • You can add freeze panes to see all the rows keeping the headers.
• For that purpose, select Cell B7 and then, go to the View tab and select the Freeze Panes icon.
• Finally, you will get results like the picture below. You can scroll down to the bottom. ### STEP 6: Update Total Amount and Interest in Dataset

• In the sixth step, you need to apply formulas to update the Total Amount and Interest in the dataset.
• First, we will apply the formula for the Updated Interest.
• Select Cell J8 and type the formula:
`=SUMIF(E7:E246,">0")` In this formula, we have used the SUMIF function to calculate the Updated Interest amount. This formula will show results when the result is greater than 0.

• Press Enter to see the result. • Then, type the value of the Updated Interest in Cell J7. • Now, select Cell J9 and type the formula:
`=C4+J7`
• It denotes the Total Amount. • For Total Savings, type the below formula in Cell J10:
`=J7-J8`
• Finally, for Updated Amount, type the below formula in Cell J11:
`=C4+J8` ### STEP 7: Use Prepayment Option to See Changes

• In the last step, add prepayments in Cell G10 and G12. • After entering the pre-payments value, you will see the changes in the Updated Interest, Total Savings, and Updated Amount. From the results, we can say that after making prepayments in the initial months the Total Savings increase, and also the Updated Interest decreases.

## Things to Remember

There are certain things you need to remember while you are working with the home loan EMI calculator.

• In the above calculator, if you add tenure years of more than 20 years, then you need to create more Rows for them to get different values.
• Also, when you are calculating the EMI, be careful with the arguments you enter inside the formula.

## Related Articles #### Mursalin

Hi there! This is Mursalin. I am an Excel and VBA content developer as well as an electrical and electronics engineer. I am always motivated to gather knowledge from different sources and find solutions to problems in easier ways. I am currently working and doing research on Microsoft Excel. Here I will be posting articles related to Microsoft Excel.

1. Reply Thank you very much for sharing this,

could you share, how to print the expected end date dynamically after each part payment.

• Reply Hello, Abu!
Thanks for your comment. Unfortunately, it is not possible to show the expected end date dynamically after each pre-payment. Because the dataset changes dynamically after a pre-payment. But you can find the expected payment date after each month using the formula below. For the dataset, we have used in this article, you can type the formula in Cell H8:
=DATE(YEAR(H7),MONTH(H7)+(12/\$J\$15),DAY(H7))
Here, Cell H7 contains the loan starting date and Cell J15 contains the number of yearly payments. 