Finance
EMI Calculator
An EMI is the fixed amount you pay your lender every month until a loan is cleared. Enter the loan amount, interest rate and tenure to see your monthly instalment, how much of it is interest, and a full repayment schedule.
How to use this calculator
- Enter the loan amount you plan to borrow.
- Enter the annual interest rate your lender has quoted, not the monthly rate.
- Set the tenure in years or months.
- Read the EMI, total interest and total payment on the right. The schedule below shows every instalment.
Formula
EMI = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1)
- P
- principal, the amount borrowed
- r
- monthly interest rate, that is the annual rate ÷ 12 ÷ 100
- n
- number of monthly instalments
When the rate is zero, the formula reduces to EMI = P ÷ n.
Worked example
A home loan of ₹25,00,000 at 8.5% per year for 20 years.
- Monthly rate (r)8.5 ÷ 12 ÷ 100 = 0.0070833
- Number of months (n)20 × 12 = 240
- EMI25,00,000 × 0.0070833 × 1.0070833²⁴⁰ / (1.0070833²⁴⁰ − 1)
- Total paymentEMI × 240
The EMI works out to about ₹21,696 a month, and total interest of roughly ₹27,07,000 over the full tenure.
What an EMI actually contains
Every EMI is split into two parts: interest for the month just gone, and repayment of the principal you still owe. The instalment stays the same, but the split inside it changes each month.
In the first year of a long loan, most of each payment is interest, because the outstanding balance is high. As the balance falls, the interest portion shrinks and more of the same EMI goes towards the principal. This is why prepaying early in a loan saves far more than prepaying near the end.
What changes your EMI the most
Tenure has a larger effect on the monthly figure than most people expect, and a larger effect on total interest in the opposite direction. Stretching a loan lowers the EMI but raises the total interest, because you owe money for longer.
- A higher loan amount raises the EMI in direct proportion: double the loan, double the EMI.
- A longer tenure lowers the EMI but increases total interest, often substantially.
- A rate change of even 0.5% changes the total interest on a 20-year home loan noticeably. Try it in the calculator.
Fixed and floating rates
This calculator assumes the rate stays the same for the whole tenure, which is how a fixed-rate loan behaves. On a floating-rate loan, the rate is linked to an external benchmark and can move. Indian lenders usually keep the EMI unchanged and adjust the tenure instead, so a rate rise means you pay for longer rather than paying more each month.
If your rate changes, run the calculator again with the new rate and the balance you still owe to see the updated picture.
Things to keep in mind
- Processing fees, documentation charges and insurance premiums are not part of the EMI and are charged separately.
- Lenders may round the EMI to the nearest rupee and adjust the final instalment, so your schedule can differ by a few rupees.
- The first instalment may include broken-period interest if your loan is disbursed in the middle of a month.
Frequently asked questions
Does a longer tenure mean a cheaper loan?
No. A longer tenure lowers the monthly instalment but increases the total interest, because the outstanding balance stays high for longer. Compare the total payment figure, not just the EMI, before choosing a tenure.
What happens if I prepay part of the loan?
A prepayment reduces the outstanding principal immediately, so all future interest is calculated on a smaller balance. Most lenders let you either reduce the EMI or shorten the tenure; shortening the tenure usually saves more interest. To estimate the effect, run the calculator again using the reduced balance and the remaining months.
Is this EMI calculator accurate for a home loan?
It uses the same reducing-balance formula that Indian banks use, so the monthly instalment should match your sanction letter closely. Small differences come from rounding, the exact disbursal date, and fees that sit outside the EMI.
What is a good EMI to income ratio?
Lenders typically want all your EMIs together to stay under 40% to 50% of your monthly take-home pay, and they apply their own rules on top. Staying below that range leaves room for savings and unexpected expenses.
Related articles
- How to calculate EMI for a home loanUnderstand the EMI formula, how interest and principal split inside each instalment, and what actually changes the total cost of a home loan.2 min read
- Prepaying a loan: what actually saves the mostWhen you prepay a loan, you usually choose between a lower EMI and a shorter tenure. Here is how the two differ and when each one makes sense.1 min read
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