How to use the EMI Calculator
- Enter the loan amount you want to borrow.
- Enter the annual interest rate offered by the bank.
- Enter the tenure in years or months and press Calculate EMI.
EMI Calculator formula
EMI = P × r × (1 + r)n ÷ [(1 + r)n − 1]
P = loan amount, r = annual rate ÷ 12 ÷ 100, n = number of monthly instalments.
Worked example
Home loan of ₹20,00,000 at 9% for 15 years: r = 0.0075, n = 180.
EMI ≈ ₹20,285 per month. Total payment ≈ ₹36,51,360, so total interest ≈ ₹16,51,360.
How to reduce your EMI or interest
- Longer tenure lowers the EMI but increases total interest.
- Part-prepayment early in the loan cuts interest the most, because early EMIs are mostly interest.
- Compare rates — even 0.5% lower on a large home loan saves lakhs over the tenure.
Frequently asked questions
What is EMI?
EMI (Equated Monthly Instalment) is the fixed amount you pay the bank every month until the loan is repaid. Each EMI has an interest part and a principal part.
How is EMI calculated?
EMI = P × r × (1+r)^n / ((1+r)^n − 1), where P is the principal, r is the monthly interest rate and n is the number of months.
Why is interest higher in the first years?
Interest is charged on the outstanding balance. The balance is highest at the start, so early EMIs contain more interest and less principal.
Does this work for car and personal loans?
Yes. The same reducing-balance formula is used for home, car, personal and education loans.
Does the EMI include processing fees or insurance?
No. Processing fees, insurance and other charges are extra. Ask your bank for the full cost.
Is a flat-rate loan the same?
No. Some lenders quote a flat rate on the original amount, which costs more than the same reducing-balance rate. This calculator uses the reducing-balance method.