EMI Calculator
Equated monthly instalment, total interest and a full year-by-year amortisation of any reducing-balance loan.
LoansInputs
One-time fee added to cost of credit
Results
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.
Step-by-step Calculation
- 1.Monthly rate
8.75 / 12 / 1000.007292 - 2.Number of instalments
20 × 12240 - 3.Growth factor (1 + r)ⁿ
(1 + 0.007292)^2405.7182 - 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
Outstanding balance by year
Explained
Why is the early EMI almost all interest?+
Interest each month is balance × monthly rate. In month one the balance is the full principal, so interest dominates. The principal component grows geometrically at (1 + r) each month.
Does a longer tenure reduce cost?+
No. It reduces the monthly outflow but increases total interest, often substantially — compare the total-interest figure across tenures before choosing.
How is APR different from the interest rate?+
APR folds processing fees and mandatory charges into an effective annual cost, so it is the honest basis for comparing two loan offers.
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.
Money 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
- ▲Floating-rate loans keep the EMI fixed and extend the tenure when the benchmark rises — confirm which lever your lender moves.
- ▲Prepayment penalties may apply on fixed-rate and non-individual loans.
References & Standards
Results are planning estimates generated in your browser. Nothing you enter is uploaded or stored. Verify material decisions with your lender, adviser or chartered accountant.