EMI Calculator
Find your equated monthly instalment (EMI) for any loan, plus the total interest and how each payment splits between interest and principal.
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An EMI, or equated monthly instalment, is the fixed amount you pay every month on a home, car, personal or education loan. Before you apply, it helps to know exactly what that amount will be and how much the loan will cost in total. This calculator works for any currency and any fixed-rate loan.
How to use the EMI calculator
- Enter the loan amount you plan to borrow.
- Enter the annual interest rate offered by the lender.
- Enter the tenure and choose whether it is in years or months.
You get the monthly EMI, the total interest, the total payment and how your first EMI splits between interest and principal. Change the tenure to see how it trades a lower EMI against a higher overall cost.
The EMI formula
Banks calculate EMIs on a reducing balance, using this formula:
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)- P is the principal, the amount borrowed
- r is the monthly interest rate, the annual rate ÷ 12 ÷ 100
- n is the tenure in months
Each month, interest is charged on the balance still outstanding. The EMI pays that interest first and the rest reduces the principal. Early on, most of each EMI is interest. Near the end, almost all of it is principal.
Worked example
A home loan of 20,00,000 (20 lakh) at 8.5% a year for 20 years:
- r = 8.5 ÷ 12 ÷ 100 ≈ 0.007083, and n = 240
- EMI = 2,000,000 × 0.007083 × 1.007083^240 ÷ (1.007083^240 − 1) ≈ 17,356 a month
- Total payment ≈ 41,65,552, so total interest is about 21,65,552
In the first month, interest is 2,000,000 × 0.007083 ≈ 14,167, so only about 3,190 of the EMI reduces the loan.
How tenure changes the EMI
The same 20 lakh loan at 8.5%:
| Tenure | Monthly EMI | Total interest |
|---|---|---|
| 15 years | 19,695 | 15,45,062 |
| 20 years | 17,356 | 21,65,552 |
| 25 years | 16,105 | 28,31,363 |
Going from 15 to 25 years lowers the EMI by about 3,600, but the interest almost doubles. Pick the shortest tenure your monthly budget can carry comfortably.
Flat rate versus reducing balance
Some personal and vehicle loans are quoted at a flat rate. A 5 lakh loan at 6% flat for 5 years charges 6% of the full 5 lakh every year, giving an EMI of about 10,833. On a reducing balance, that EMI is the same as an interest rate of about 10.8%. Always ask for the reducing balance rate, or enter the EMI the lender quotes and compare it with this calculator.
Tips to lower your EMI burden
- Keep total EMIs under about 40% of take-home pay. Lenders often use a similar limit, and it leaves room for savings and emergencies.
- Improve your credit score before applying. Even a 0.5% lower rate on a 20-year loan saves a large sum.
- Make part-prepayments early. A single extra payment of 1,00,000 at the end of the first year on the example loan cuts the tenure by about 26 months.
- Watch for floating rates. If the rate rises, your EMI or your tenure goes up. Rerun the numbers with a rate 1–2% higher to test your budget.
- Compare the full cost. Processing fees, insurance and other charges are not part of the EMI but are part of what you pay.
The figures here are estimates for planning. Your lender’s schedule may differ slightly because of rounding and the exact date of disbursal.
Frequently asked questions
What does EMI stand for?
EMI means equated monthly instalment. It is the fixed amount you pay the lender every month until the loan is repaid. Each EMI contains some interest and some principal, and the mix changes over time even though the total stays the same.
Does a longer tenure reduce my EMI?
Yes, but it raises the total interest. On a 20 lakh loan at 8.5%, stretching the tenure from 20 to 25 years cuts the EMI by about 1,250 a month but adds roughly 6.7 lakh in interest.
Is the EMI the same for a flat rate and a reducing balance rate?
No. This calculator uses the reducing balance method, where interest is charged only on the amount you still owe. Some lenders quote a flat rate charged on the original amount for the whole term, which costs much more than the same number on a reducing balance.
Are processing fees and insurance included?
No. The EMI covers principal and interest only. Processing fees, insurance premiums and taxes on fees are extra, so ask the lender for the annual percentage rate or the full cost before you sign.
How do part-prepayments change my EMI?
After a part-prepayment, most lenders either keep the EMI the same and shorten the tenure, or keep the tenure and lower the EMI. Keeping the EMI and shortening the tenure usually saves more interest.