Loan EMI Calculator
Calculate your Equated Monthly Installment (EMI) for any loan. Enter the loan amount, interest rate, and loan tenure to see your monthly payment, total interest, and total repayment.
Monthly EMI
How EMI is Calculated
EMI (Equated Monthly Installment) is calculated using the reducing balance method. Each EMI payment includes both principal and interest components. As you pay down the loan, the interest portion decreases while the principal portion increases.
EMI Formula
Where:
P = Principal loan amount
r = Monthly interest rate (annual rate / 12 / 100)
n = Total number of months
Example Calculation
Example
Loan Amount: ₹10,00,000
Interest Rate: 10.5% per annum
Tenure: 10 years (120 months)
Monthly EMI: ₹13,493
Total Interest: ₹6,19,160
Total Payment: ₹16,19,160
Useful Tips
- Shorter loan tenures mean higher EMIs but lower total interest
- Making prepayments or part-payments reduces your outstanding principal and total interest
- Compare interest rates from multiple lenders before finalizing a loan
Worked example: ₹10,00,000 loan at three different tenures
The same loan amount and interest rate produces a very different total cost depending on tenure. Here is ₹10,00,000 at 9% p.a.:
| Tenure | Monthly EMI | Total Interest Paid | Total Repayment |
|---|---|---|---|
| 5 years (60 months) | ₹20,758 | ₹2,45,480 | ₹12,45,480 |
| 10 years (120 months) | ₹12,668 | ₹5,20,160 | ₹15,20,160 |
| 15 years (180 months) | ₹10,143 | ₹8,25,740 | ₹18,25,740 |
| 20 years (240 months) | ₹8,997 | ₹11,59,280 | ₹21,59,280 |
Doubling the tenure from 10 to 20 years cuts the monthly EMI by roughly 29% — but more than doubles the total interest paid. Test your own numbers above before choosing tenure on EMI affordability alone.
How lenders actually calculate EMI
Every EMI uses the same reducing-balance formula:
EMI = P × r × (1+r)n / [(1+r)n − 1]
where P is the principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly instalments. Because interest is charged on the reducing balance, early EMIs are mostly interest and later EMIs are mostly principal — which is also why prepaying early in the loan saves far more interest than prepaying the same amount later.
Fixed vs. floating rate — why your EMI might change mid-loan
On a fixed-rate loan, EMI stays constant for the full tenure. On a floating-rate loan (the norm for most Indian home and personal loans, tied to a repo-linked lending rate set by the lender), your EMI or tenure can change when the RBI repo rate moves. Most lenders adjust the tenure first and only change the EMI amount if the tenure hits its cap — check your loan agreement for which one applies to you.
Common EMI mistakes to avoid
- Comparing loans by EMI alone. A lower EMI over a longer tenure can cost far more in total interest — always compare total repayment, not just the monthly figure.
- Ignoring processing fees and insurance add-ons. These are not in the EMI formula but add real cost — ask for the all-in APR, not just the headline interest rate.
- Not accounting for prepayment penalties. Floating-rate loans to individuals cannot legally carry prepayment penalties in India, but fixed-rate and business loans often do — check before assuming you can prepay for free.
- Maxing out EMI-to-income ratio. Most lenders cap this around 40–50% of monthly income; staying below that yourself leaves room for rate increases on floating loans.
Frequently Asked Questions
EMI stands for Equated Monthly Installment. It's the fixed amount you pay each month to repay a loan over a specified period. Each EMI contains both principal repayment and interest payment.
You can reduce your EMI by: (1) Extending the loan tenure, (2) Making a larger down payment to reduce the principal, (3) Negotiating a lower interest rate, or (4) Transferring the loan to a lender offering lower rates.
For fixed-rate loans, EMI remains constant throughout the tenure. For floating-rate loans, EMI can change when the interest rate changes. Some lenders adjust the EMI amount while others adjust the tenure.