EMI Calculator
Work out your monthly loan installment, total interest, and a full year-by-year repayment schedule.
Table of Contents
What Is EMI?
An EMI, or Equated Monthly Installment, is the fixed amount you pay your lender every month for a home loan, car loan, or personal loan until the debt is cleared. It's "equated" because the amount stays the same every month, even though the split between principal and interest inside that payment keeps shifting — you pay mostly interest in the first few years and mostly principal toward the end.
How to Use This Calculator
- Enter the loan amount you plan to borrow.
- Enter the annual interest rate your lender has quoted.
- Enter the tenure in years or months.
- Tap Calculate EMI to see your monthly payment, total interest, and the yearly breakdown.
The EMI Formula
Banks and NBFCs in India calculate EMI using the reducing balance method, where interest is charged only on the loan amount still outstanding:
Here, P is the principal (loan amount), r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of monthly installments. Total interest is simply (EMI × n) − P.
Worked Example
Say you borrow ₹10,00,000 at 8.5% per annum for 20 years (240 months). The monthly rate works out to 8.5 ÷ 12 ÷ 100 = 0.007083. Plugging into the formula gives:
Notice the total interest here is actually more than the principal itself — a direct result of stretching a loan to 20 years. Shortening the tenure to, say, 10 years would roughly double the EMI but cut total interest by more than half.
Understanding Your Result
The principal vs. interest split shown above tells you how much of your total payment is actually the money you borrowed versus the cost of borrowing it. The yearly schedule shows how your outstanding balance shrinks — pay attention to how slowly it drops in the first few years compared to the last few; that's the reducing-balance method at work.
Important Notes
- This calculator assumes a fixed interest rate for the entire tenure and standard monthly compounding.
- It doesn't include processing fees, loan insurance, or prepayment charges — check these separately with your lender.
- For floating-rate loans, re-run the calculator with the new rate whenever your lender revises it.
- Actual bank EMI may be rounded differently by a few rupees depending on the lender's internal convention.
Frequently Asked Questions
What is EMI?
EMI stands for Equated Monthly Installment — a fixed monthly payment made up of principal and interest that clears a loan by the end of its tenure.
How is EMI calculated?
Using the reducing balance formula EMI = P × r × (1+r)^n / ((1+r)^n − 1), where r is the monthly interest rate and n is the number of installments.
Does EMI change if I prepay part of the loan?
Yes — your lender will typically let you choose between a lower EMI (same tenure) or a shorter tenure (same EMI) after a prepayment.
What's the difference between flat rate and reducing balance interest?
Reducing balance interest is charged only on the outstanding amount and falls every month. Flat rate interest is charged on the full original amount throughout, making its effective cost much higher than the quoted rate.
Does this include processing fees or insurance?
No — this is the standard EMI formula based only on principal, rate, and tenure. Fees and insurance vary by lender.
Can I calculate EMI for a floating interest rate?
The calculator assumes a fixed rate. For floating-rate loans, re-run it with the updated rate whenever it changes.
What tenure should I choose?
A shorter tenure raises your EMI but sharply cuts total interest. Many borrowers pick the shortest tenure whose EMI still fits comfortably in their monthly budget.
Is a longer tenure always worse?
Not necessarily — it frees up monthly cash flow, and you can always prepay later when you have surplus funds to reduce the interest.