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Equated monthly instalment, total interest and a full year-by-year amortisation of any reducing-balance loan.
Inputs
One-time fee added to cost of credit
How to use this calculator: EMI Calculator
Equated monthly instalment, total interest and a full year-by-year amortisation of any reducing-balance loan. The example below is calculated by this page's real engine from the displayed inputs.
1Enter only the amount you will borrow from the lender. For a house purchase, exclude your down payment. For a car purchase, exclude registration, insurance or accessories unless those costs are included in the loan.
2Enter the annual percentage rate quoted in the loan offer. The calculator converts it into a monthly rate because most retail EMIs are paid once every month.
3Enter the loan period in years. A longer tenure normally produces a lower EMI, but it can substantially increase the total interest paid over the full loan.
4Compare the calculated EMI with your stable monthly income, unavoidable household expenses, insurance premiums and emergency-fund contribution. Do not base affordability only on your highest-income month.
5A lower EMI can look attractive, but it may come from a much longer tenure. Always compare total repayment and total interest for at least two tenure options.
6The calculator estimates principal and interest. Before accepting a loan, verify processing fees, insurance, documentation charges, late fees, prepayment rules and whether the interest rate is fixed or floating.
Input guide and example values
Use values from the same measurement basis and time period. Conditional fields appear only when the related option is selected.
Input
Example value
Why it matters
Currency
₹ Indian Rupee (INR)
Select the option that matches the real installation or scenario.
Loan amount (principal)
2500000
Measured or known loan amount (principal) used by the calculation engine.
Annual interest rate
8.75 % p.a.
Measured or known annual interest rate used by the calculation engine.
Loan tenure
20 years
Measured or known loan tenure used by the calculation engine.
Processing fee (optional)
0
One-time fee added to cost of credit
Formula, derivation and worked example
A reducing-balance loan charges interest only on the outstanding principal. The EMI is the constant payment that exactly retires the loan over n months — it is the future-value-of-annuity formula rearranged for the payment. Early instalments are mostly interest because the balance is high; as the balance falls, the principal share of each EMI rises, which is why the amortisation schedule below is steeply skewed.
r = annual rate / 12 / 100
n = tenure in years × 12
EMI = P × r × (1 + r)ⁿ / [(1 + r)ⁿ − 1]
Total payment = EMI × n
Total interest = Total payment − P
Substitution steps
1. Monthly rate
8.75 / 12 / 100
= 0.007292
2. Number of instalments
20 × 12
= 240
3. Growth factor (1 + r)ⁿ
(1 + 0.007292)^240
= 5.7182
4. EMI
P·r·(1+r)ⁿ / ((1+r)ⁿ − 1)
= ₹22,092.77
5. Total payment
22,093 × 240
= ₹5,302,264.25
6. Total interest
5,302,264 − 2,500,000
= ₹2,802,264.25
Computed example results
Monthly EMI
₹22,092.77
Total interest payable
₹2,802,264.25
112.1% of principal
Total payment (principal + interest)
₹5,302,264.25
Interest in year 1
₹216,844.70
Highest interest year
Effective annual cost (APR)
9.11%
No fees entered
Number of instalments
240 months (20.0 years)
Understanding the result
Read the main result together with supporting checks, assumptions, limits and intermediate values.
For a manual check, repeat the first equation, confirm the units and change one input at a time.
Next logical calculator
Continue with Loan Calculator
Useful next check because both tools use Annual interest rate and Loan tenure, while Loan Calculator answers a different part of the same workflow.
EMI means Equated Monthly Instalment. It is the fixed monthly payment used to repay many home, car, education and personal loans. Each EMI contains two parts: interest charged for that month and a portion that reduces the unpaid principal.
Although the EMI amount normally remains the same in a fixed-rate loan, the composition changes over time. During the first months, more of the EMI pays interest because the outstanding balance is high. Near the end of the tenure, more of the EMI goes toward principal repayment.
This is called amortisation or reducing-balance repayment. It is different from flat-rate interest, where interest is calculated on the original loan amount for the entire tenure.
Why a longer loan tenure can cost much more
A longer tenure reduces the immediate monthly EMI because repayment is spread across more months. However, interest continues to accumulate for a longer period, so the total cost of borrowing increases.
For example, changing a home-loan tenure from 15 years to 25 years may make the EMI easier to manage, but can add a large amount of total interest. Before choosing a tenure, compare at least a short, medium and long repayment option.
The best tenure is not automatically the shortest one. Keep sufficient cash flow for medical needs, job changes, school expenses, insurance and an emergency fund.
Fixed-rate versus floating-rate EMI
A fixed-rate loan usually keeps the quoted interest rate unchanged for a stated period. This can make monthly planning easier, but the rate may be higher than a floating-rate option.
A floating-rate loan can change when the lender's benchmark or market-linked rate changes. If the rate rises, the lender may increase your EMI, extend the remaining tenure, or use a combination of both.
Before accepting a floating-rate loan, read the reset frequency, benchmark, spread, rate-change communication process and prepayment conditions in the loan agreement.
How prepayment affects EMI and tenure
A part-prepayment reduces the outstanding principal before the original schedule ends. Because future interest is calculated on the remaining balance, prepaying early in the loan can often save more interest than prepaying near the end.
After a prepayment, some lenders let you reduce the EMI while keeping the original tenure. Others let you keep the EMI unchanged and reduce the tenure. Reducing tenure often saves more interest, while reducing EMI can improve monthly cash flow.
Always check whether the lender charges a prepayment or foreclosure fee, especially for fixed-rate products or business loans.
Common EMI mistakes to avoid
Do not compare loans only by EMI. Compare annual rate, total interest, processing fee, insurance requirement, tenure, prepayment rules and rate-reset conditions.
Do not borrow the maximum amount a lender approves simply because the EMI appears manageable. Approval is based on lender criteria, while affordability should include your own savings goals and future responsibilities.
Keep copies of the sanction letter, repayment schedule, key fact statement and every payment receipt. These documents are useful for checking rate changes, prepayments and loan closure.
Formula
r = annual rate / 12 / 100
n = tenure in years × 12
EMI = P × r × (1 + r)ⁿ / [(1 + r)ⁿ − 1]
Total payment = EMI × n
Total interest = Total payment − P
A reducing-balance loan charges interest only on the outstanding principal. The EMI is the constant payment that exactly retires the loan over n months — it is the future-value-of-annuity formula rearranged for the payment. Early instalments are mostly interest because the balance is high; as the balance falls, the principal share of each EMI rises, which is why the amortisation schedule below is steeply skewed.
Engineering notes
This calculator estimates EMI from the inputs you provide; it is not a loan offer or financial advice.
Use the loan sanction letter and repayment schedule from your lender as the final reference.
For floating-rate loans, review the updated schedule whenever the lender changes the rate.
For a major financial decision, consider advice from a qualified financial professional.
Formulas explained
EMI = P × r × (1 + r)^n / ((1 + r)^n − 1)
This is the standard reducing-balance amortisation formula. It finds one equal monthly payment that repays both the principal and the interest accrued on the outstanding balance within the selected number of months.
P
Principal: the original amount borrowed from the lender.
Total number of monthly instalments: loan tenure in years × 12.
If the interest rate changes during a floating-rate loan, the lender may change the EMI, the remaining tenure, or both. This calculation assumes the entered rate remains constant.
Total interest = (EMI × n) − P
The borrower pays the same EMI n times. Removing the original principal from that total gives the interest paid over the entire scheduled tenure.
EMI × n
Total of every scheduled monthly instalment.
P
Original principal loan amount.
This does not include one-time costs such as processing fees, insurance premiums, legal charges, taxes or penalties.
Monthly interest = outstanding balance × r
A reducing-balance loan charges interest only on the unpaid balance. This is why the interest part of an EMI is higher at the start and becomes lower as principal is repaid.
Outstanding balance
Principal amount that remains unpaid before the month's EMI.
r
Monthly interest rate.
The remaining EMI after monthly interest is deducted goes toward reducing principal.
EMI is not the complete borrowing cost
Monthly EMI covers scheduled principal and interest. Processing fee, loan insurance, valuation fee, legal charges, documentation charges, taxes and late-payment penalties can increase the actual cost.
Principal versus interest in the first year
In a long-tenure reducing-balance loan, initial EMIs may contain a large interest share. The principal share increases gradually as the outstanding loan balance falls.
Choosing EMI reduction or tenure reduction
After prepayment, EMI reduction helps monthly cash flow. Tenure reduction usually reduces total interest more because the loan closes earlier. Choose based on your cash-flow needs and lender policy.
Use an emergency buffer
Avoid committing nearly all monthly surplus to EMI. Keep a realistic buffer for unexpected expenses, income changes and essential insurance premiums.
Assumptions
Interest is compounded monthly on the reducing balance.
The rate stays fixed for the whole tenure (floating loans reprice with the benchmark).
The first EMI falls one month after disbursal; no moratorium.
Insurance, GST on fees and late-payment charges are excluded unless entered.
Tips
Shortening the tenure cuts total interest far more than shaving the rate by a few basis points.
One extra EMI a year on a 20-year home loan typically removes 3–4 years of payments.
Compare lenders on APR (rate plus fees), not the headline rate.
Warnings
Missing EMIs can result in late fees, additional interest, credit-score impact and recovery action under the loan agreement.
A lower monthly EMI can hide a much higher total interest cost when tenure is extended.
Do not use this calculator as a substitute for lender documents, legal advice or personalised financial advice.
Standards & references
RBI reducing-balance method
APR disclosure (Key Fact Statement)
IS 15883 (project cost planning)
Frequently asked questions
How is EMI calculated?+
EMI is calculated from the principal loan amount, monthly interest rate and total number of monthly instalments. The standard reducing-balance formula ensures that equal monthly payments clear the loan by the end of the selected tenure.
Why is the interest part of EMI higher in the beginning?+
Interest is charged on the outstanding loan balance. At the beginning, the balance is close to the full loan amount, so interest is high. As principal is repaid, interest falls and more of each EMI reduces principal.
Should I choose a lower EMI or a shorter loan tenure?+
A lower EMI may improve monthly cash flow, while a shorter tenure usually reduces total interest. Compare both options using your income stability, emergency savings and other financial goals.
What happens if I prepay part of my loan?+
Part-prepayment reduces the outstanding principal. The lender may reduce your EMI, reduce the remaining tenure or offer a choice between both. Reducing tenure commonly saves more future interest.
Does a processing fee change my EMI?+
A processing fee may not change the scheduled EMI if paid separately, but it increases the complete cost of borrowing. If the fee is added to the loan amount, it can also increase EMI and interest.
Does a floating interest rate change EMI?+
It can. When the lender changes a floating rate, it may change your EMI, extend or shorten the remaining tenure, or adjust both according to the loan agreement.
Is a home-loan EMI tax deductible?+
Tax treatment depends on current laws, property use, loan purpose, ownership, repayment status and your personal situation. Verify current eligibility through official sources or a qualified tax professional.
Can I use this calculator for a car loan or personal loan?+
Yes. Enter the actual amount borrowed, annual interest rate and tenure. Ensure you separately review product-specific charges, insurance and prepayment terms.