EMI Calculator
EMI (Equated Monthly Instalment) is the fixed amount you repay every month on a home, car, education or personal loan until the loan is fully paid off. Each EMI is a mix of principal and interest — early instalments are interest-heavy, later ones are mostly principal. Enter the loan amount, the annual interest rate your lender quotes, and the tenure to see your monthly EMI, total interest paid over the loan, and the total amount you will repay.
How to use the emi calculator
- Enter the loan amount (principal) you plan to borrow, in rupees.
- Enter the annual interest rate your bank or NBFC has quoted — check whether it is fixed or floating.
- Enter the tenure in years (most home loans run 15–30 years, car loans 3–7 years, personal loans 1–5 years).
- Read the monthly EMI, and compare total interest against total payment to see the real cost of the loan.
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 (years × 12).
Worked examples
A ₹25 lakh home loan
₹25,00,000 at 8.5% for 20 years works out to an EMI of about ₹21,696 a month. Over 20 years you repay about ₹52.07 lakh in total, of which about ₹27.07 lakh is interest.
A ₹8 lakh car loan
₹8,00,000 at 9.5% for 5 years gives an EMI of about ₹16,795 a month, with total interest of roughly ₹2.08 lakh.
How the loan balance actually declines, month by month
Because interest is charged on the outstanding balance, each EMI is split differently between interest and principal — early payments are interest-heavy, later ones are principal-heavy, even though the EMI itself stays the same. A simplified look at the first few months of a ₹25,00,000 loan at 8.5% over 20 years (EMI ≈ ₹21,696):
| Month | Interest portion | Principal portion | Balance remaining |
|---|---|---|---|
| 1 | ≈ ₹17,708 | ≈ ₹3,987 | ≈ ₹24,96,013 |
| 12 | ≈ ₹17,386 | ≈ ₹4,309 | ≈ ₹24,50,244 |
| 120 (year 10) | ≈ ₹12,460 | ≈ ₹9,235 | ≈ ₹17,49,846 |
| 240 (final) | ≈ ₹153 | ≈ ₹21,543 | ₹0 |
This is why prepaying early in a loan's life saves far more interest than prepaying the same amount later — every rupee of early prepayment directly reduces a balance that would otherwise have accrued interest for years. Most Indian floating-rate home loans allow penalty-free prepayment for individual borrowers (per RBI direction), so even small, occasional lump-sum prepayments in the first few years can meaningfully cut total interest.
Common mistakes to avoid
- Comparing only the EMI amount between two loans without checking the tenure — a longer tenure lowers the EMI but sharply increases total interest paid.
- Forgetting that floating-rate EMIs change when the bank’s benchmark rate changes; this calculator assumes the rate stays fixed for the whole tenure.
- Not accounting for processing fees, prepayment charges or insurance add-ons, which increase the real cost beyond the EMI shown here.
Frequently asked questions
How is EMI calculated in India?
Indian lenders use the reducing-balance method: EMI = P × r × (1+r)^n ÷ [(1+r)^n − 1], where r is the monthly rate and n the number of months. Interest is charged only on the outstanding balance, so the interest portion of each EMI falls over time.
Does a longer tenure reduce my total cost?
No — a longer tenure lowers your monthly EMI but increases the total interest you pay over the life of the loan, since you carry the outstanding balance for longer.
What is a good EMI-to-income ratio?
Most Indian lenders prefer your total EMIs (all loans combined) to stay under 40–50% of your monthly take-home income.
Can I prepay my loan to reduce EMI or tenure?
Yes. Most floating-rate loans in India allow prepayment without penalty (RBI rules for individual borrowers). Prepaying reduces either your EMI or your remaining tenure, and cuts total interest.
Reviewed September 29, 2026 by the CalcSolver editorial team. Found a mistake? Tell us; see our editorial policy.