EMI
Calculator
Work out your monthly loan instalment, the total interest you'll pay and the total cost of the loan from principal, rate and tenure.
Your loan
Your EMI
Assumes a fixed rate and equal monthly instalments.
What is an EMI?
An Equated Monthly Instalment (EMI) is the fixed amount you repay to your lender each month for the agreed tenure of the loan. Every EMI covers two components: an interest portion charged on the outstanding principal, and a principal repayment portion that reduces the balance you owe. In the early months, the split heavily favours interest; as the outstanding balance falls with each payment, the interest component shrinks and a larger share goes toward repaying principal. By the final instalment the loan is completely cleared.
Indian banks — whether for home loans, car loans, personal loans or business loans — almost universally use the reducing-balance method, which means interest accrues only on the amount still outstanding, not on the original disbursed amount. This is more borrower-friendly than the flat-rate method sometimes seen in informal lending.
The EMI formula
The standard reducing-balance EMI formula is:
- EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1)
- P = principal (the loan amount disbursed)
- r = monthly interest rate = annual rate ÷ 12 ÷ 100
- n = total number of monthly instalments = tenure in years × 12
- Total payment = EMI × n
- Total interest = total payment − P
When the interest rate is zero (for example, a zero-cost EMI scheme), the formula simplifies to EMI = P ÷ n — the principal divided equally across all instalments.
How to use this calculator
- Loan amount: enter the principal your lender will disburse — for a home loan this is the sanctioned amount, not the property value.
- Annual interest rate: enter the rate as quoted by your bank in percentage per annum (for example, enter 9 for 9% p.a.). Do not divide it yourself; the calculator handles the monthly conversion.
- Tenure: enter the repayment period in years. Most home loans in India run from 5 to 30 years; personal loans typically range from 1 to 5 years.
- Press Calculate (or change any input) to instantly see your monthly EMI, the total interest payable and the full cost of the loan.
Worked examples
Example 1 — Home loan: You borrow ₹50,00,000 at 8.5% per annum for 20 years. Monthly rate r = 8.5 ÷ 12 ÷ 100 = 0.007083; n = 240 months. The EMI works out to approximately ₹43,391. Total payment over 240 months is roughly ₹1,04,13,840, of which ₹54,13,840 is pure interest — more than the original loan amount. Choosing a 15-year tenure instead would raise the EMI to about ₹49,244 but cut total interest to around ₹38,63,920, a saving of over ₹15 lakh.
Example 2 — Car loan: You finance ₹8,00,000 at 9.5% p.a. for 5 years. Monthly rate = 0.007917; n = 60. EMI comes to roughly ₹16,738. Total payment = ₹10,04,280, so total interest = ₹2,04,280 over the five years.
Example 3 — Personal loan: ₹3,00,000 at 13% p.a. for 3 years. Monthly rate = 0.010833; n = 36. EMI ≈ ₹10,108. Total payment ≈ ₹3,63,888; interest ≈ ₹63,888.
These examples illustrate two key principles: (a) the longer the tenure, the lower the EMI but the higher the total interest; (b) even a small difference in interest rate compounds significantly over long tenures, so comparing lender offers carefully pays off.
How to lower your interest cost
- Choose a shorter tenure if your monthly cash flow allows it. Shorter tenures raise the EMI but sharply reduce total interest.
- Make part-prepayments early. The biggest interest savings come from prepayments made in the first third of the loan tenure, when the outstanding principal is highest. Many Indian banks and NBFCs allow part-prepayment without penalty on floating-rate loans under RBI guidelines.
- Compare effective interest rates, not headline rates. Processing fees, insurance bundled into the loan and other charges affect the true cost. Use the total payable amount from this calculator as a baseline for comparison.
- Negotiate on rate. A good CIBIL score (750 and above) gives you bargaining power. Even a 0.25% reduction on a ₹50 lakh, 20-year home loan saves roughly ₹3–4 lakh in total interest.
FAQ
How is EMI calculated?
EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1), where P is the principal, r is the monthly rate (annual rate ÷ 12 ÷ 100) and n is the number of months (years × 12). The formula assumes a fixed rate and equal instalments throughout the tenure.
What is the total interest on a loan?
Total interest = (EMI × number of instalments) minus the original principal. It is the additional amount you pay the lender over the life of the loan on top of the money you borrowed.
Does a longer tenure reduce EMI?
Yes, spreading the principal over more months lowers each EMI. But the outstanding balance stays high for longer, so you pay more total interest. A lower monthly payment comes at the cost of a higher overall outgo.
Does a longer tenure reduce my total cost?
No. A longer tenure lowers the monthly EMI but increases total interest paid. If minimising the total cost of the loan is your goal, choose the shortest tenure your budget can support and make part-prepayments when possible.
What is reducing-balance interest?
Interest is charged only on the outstanding principal, which falls with every EMI payment. This is the standard method used by scheduled Indian banks for home, car and personal loans, and it is the method this calculator uses. Under the flat-rate method (less common, sometimes seen in two-wheeler loans), interest is calculated on the full original principal throughout — which makes the effective rate much higher than it appears.
When does prepayment make the biggest impact?
Early in the loan tenure, when the outstanding principal is at its peak. A lump-sum prepayment in year 2 of a 20-year loan reduces the base on which interest compounds for the remaining 18 years, delivering far greater savings than the same amount prepaid in year 15.
Can I use this calculator for home, car and personal loans?
Yes. The reducing-balance EMI formula is the same regardless of loan type. Enter the sanctioned loan amount, the annual rate your lender quotes, and the tenure. The calculator instantly returns your monthly EMI, total interest and total payable amount.
Is the interest rate entered here per annum or per month?
Enter the annual rate exactly as your bank quotes it — for example, enter 9 for 9% per annum. The calculator divides by 12 internally to derive the monthly rate used in the formula. Do not enter the monthly rate directly.
Track markets & options on TradePulse
Live NSE option chains, PCR, IV and max pain — free to explore.