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EMI Calculator

An EMI is the fixed monthly payment on a loan. This calculates it, and shows the part most people underestimate: how much of the total you repay is interest, and how little of an early instalment goes towards the principal.

Check the working

A worked example

A fixed case, for reference.

Take a ₹50,00,000 home loan at 8.5% for 20 years.

  1. Monthly rate

    i=8.51200=0.00708333i = \frac{8.5}{1200} = 0.00708333

  2. Number of instalments

    n=20×12=240n = 20 \times 12 = 240

  3. Compound the growth factor

    (1.00708333)240=5.44005(1.00708333)^{240} = 5.44005

  4. Apply the formula

    50,00,000×0.00708333×5.440055.44005−1=43,391\frac{50{,}00{,}000 \times 0.00708333 \times 5.44005}{5.44005 - 1} = 43{,}391

The EMI is about ₹43,391. Over 240 instalments you repay roughly ₹1.04 crore on a ₹50 lakh loan — more than ₹54 lakh of it interest. In the first month, about ₹35,400 of that ₹43,391 is interest and only ₹8,000 reduces the principal.

The formula

EMI=P×i×(1+i)n(1+i)n−1EMI = \frac{P \times i \times (1+i)^{n}}{(1+i)^{n} - 1}

The standard reducing-balance instalment formula.

i=r12×100n=y×12i = \frac{r}{12 \times 100} \qquad n = y \times 12

The annual rate and tenure converted to a monthly basis.

What each symbol means

EMI
the equated monthly instalment
P
the loan principal
r
the annual interest rate, as a percentage
i
the monthly interest rate
y
the tenure in years
n
the total number of instalments

What this assumes, and where it stops

Assumptions

  • The interest rate stays fixed for the entire tenure.
  • Every instalment is paid on time, and none is missed.
  • Interest is calculated on the reducing balance, monthly, which is standard for Indian home and personal loans.
  • No prepayments are made.

Limitations

  • Processing fees, insurance premiums bundled with the loan, and other charges are not included, and they can be significant.
  • Floating-rate loans change over time. A rate revision alters either the EMI or the tenure, and neither is modelled here.
  • Prepayments are not modelled, and they change the outcome dramatically — even small, early prepayments cut the total interest substantially.
  • Tax deductions available on home loan interest and principal are not applied, so the effective cost for some borrowers is lower than shown.

What this calculator does

  • Calculates the monthly instalment for a reducing-balance loan.
  • Shows the total interest paid over the life of the loan.
  • Gives a year-by-year amortisation schedule with the outstanding balance.

Common questions

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