EMI Calculator
This calculator computes your Equated Monthly Instalment (EMI) using the reducing-balance method — the standard used by every Indian bank for home, car, and personal loans.
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What is the EMI Calculator?
An EMI (Equated Monthly Instalment) is the fixed amount you pay your lender every month until a loan is fully repaid. Each EMI has two parts — interest on the outstanding balance and repayment of principal. Early in the loan the interest portion dominates; as the balance shrinks, more of each EMI goes toward principal.
Indian banks calculate EMIs on a reducing-balance basis, meaning interest is charged only on the amount you still owe, not the original loan.
How to Calculate
The EMI is calculated with the standard amortization formula:
- Convert the annual rate to a monthly decimal rate:
r = annual rate ÷ 12 ÷ 100. - Take the tenure in months,
n. - Apply
EMI = P × r × (1+r)n / ((1+r)n − 1), where P is the loan amount.
Total interest is then (EMI × n) − P. The calculator also produces a full year-by-year amortization schedule so you can see exactly how principal and interest are split each year.
Formula
EMI = P × r × (1+r)n / [ (1+r)n − 1 ]
- P — loan principal
- r — monthly interest rate (annual rate ÷ 1200)
- n — loan tenure in months
Each month, interest is charged only on the outstanding balance (not the original principal), so the interest portion of your EMI shrinks and the principal portion grows every month until the loan is fully repaid.
Worked Examples
Example 1 u2014 20-year home loan
₹25,00,000 at 8.5% for 240 months: EMI ≈ ₹21,696, total interest ≈ ₹27.1 lakh — more than the loan itself over 20 years.
Example 2 u2014 Shorter tenure saves interest
The same ₹25,00,000 at 8.5% over 15 years raises the EMI to about ₹24,617 but cuts total interest to roughly ₹19.3 lakh — a shorter tenure costs more per month but far less overall.
Example 3 u2014 Car loan
₹8,00,000 car loan at 9.5% for 5 years (60 months): EMI ≈ ₹16,798, total interest ≈ ₹2.08 lakh.
Definitions
- Loan Amount (Principal)
- The amount you borrow from the lender.
- Interest Rate
- The annual rate charged on the outstanding balance, using the reducing-balance method.
- Loan Tenure
- The repayment period in months (e.g. a 20-year loan is 240 months). Longer tenures lower the EMI but raise total interest.
- EMI
- Equated Monthly Instalment — the fixed amount you pay each month, part interest and part principal.
- Total Interest
- The sum of all interest paid over the life of the loan, on top of the principal.
How to Use
- Enter your loan amount (principal).
- Enter the annual interest rate offered by your lender.
- Enter the loan tenure in months (e.g. a 20-year loan is 240 months).
- Read your monthly EMI, total interest, and total payment instantly.