EMI Calculator — Work Out Your Loan EMI in Seconds
Planning a home, car or personal loan? Enter the loan amount, interest rate and tenure to see your monthly EMI, total interest payable and the total cost of the loan.
Monthly EMI
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Total interest payable
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Total payment (principal + interest)
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Principal vs interest
How your total payment splits up.
How EMI is calculated
An EMI has two parts: interest on the outstanding loan balance, and a repayment of principal. Because interest is charged on the reducing balance, early EMIs are mostly interest while later EMIs are mostly principal. The standard formula is:
EMI = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1)
Here P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly instalments. The RBI requires Indian lenders to use this reducing-balance method.
Worked example
Take a ₹50 lakh home loan at 9% per annum for 20 years. Monthly rate r = 0.0075, n = 240:
EMI = 50,00,000 × 0.0075 × (1.0075)²⁴⁰ / ((1.0075)²⁴⁰ − 1) ≈ ₹44,986 per month
Total paid over 20 years ≈ ₹1.08 crore, of which about ₹58 lakh is interest — more than the principal itself. This is why even a small rate difference matters: at 8.5% instead of 9%, the same loan's EMI drops to about ₹43,391, saving roughly ₹3.8 lakh in interest.
Smart borrowing tips for India
- Keep total EMIs under 40% of income. Lenders use this thumb rule too; breaching it hurts both approval odds and your monthly budget.
- Shorter tenure saves lakhs. A 15-year tenure instead of 20 raises the EMI but slashes total interest. Choose the shortest tenure whose EMI you can comfortably afford.
- Prepay when you can. Floating-rate home loans in India carry no prepayment penalty. One extra EMI a year can cut 4–5 years off a 20-year loan.
- Watch the fine print. Processing fees (0.25–1%), prepayment charges on fixed-rate loans, and insurance bundled with the loan all add to the true cost — this calculator covers principal and interest only.
- Build your CIBIL score. A score above 750 typically unlocks the best advertised rates; below 650 you may pay 1–2% more or face rejection.
EMI Calculator FAQs
What is an EMI?
EMI (Equated Monthly Instalment) is the fixed amount you pay your lender every month until the loan is fully repaid. Each EMI has two parts: interest on the outstanding balance and a portion that reduces the principal. Early EMIs are mostly interest; later ones are mostly principal.
How can I reduce my loan EMI?
You can lower your EMI by choosing a longer tenure (though you pay more total interest), negotiating a lower interest rate, making a larger down payment, or improving your CIBIL score before applying so lenders offer you better rates.
Should I choose a fixed or floating interest rate?
Fixed rates keep your EMI constant for the whole tenure, giving certainty. Floating rates move with market rates — EMIs usually start lower but can rise when rates go up. Over long home loan tenures, floating rates have historically worked out cheaper.
Does prepaying my loan save money?
Yes, significantly. Because interest is charged on the reducing balance, even one extra EMI per year as prepayment can cut years off a home loan and save lakhs in interest. Most floating-rate home loans in India carry no prepayment penalty.
What affects the interest rate I am offered?
Your CIBIL credit score, income stability, loan-to-value ratio, loan tenure and the lender's own policies all matter. A CIBIL score above 750 typically unlocks the best advertised rates.
Is EMI calculated on a reducing balance in India?
Yes. RBI guidelines require banks and NBFCs to compute interest on the reducing (diminishing) balance, so interest is charged only on the outstanding principal each month. This calculator uses the reducing-balance method.