EMI Calculator
The EMI Calculator estimates your monthly equated monthly installment (EMI) for a loan. It shows the EMI amount, total interest payable, and the total amount you will repay over the loan's tenure.
EMI Calculator
The total amount you plan to borrow.
The annual interest rate charged by the lender.
The duration over which you will repay the loan.
What the result means
The EMI is a fixed monthly payment you make to repay the loan. It includes both principal and interest. The total interest is the total cost of borrowing, and the total payment is the sum of loan amount and total interest.
How to use this calculator
- 1Enter the loan amount you plan to borrow.
- 2Enter the annual interest rate charged by the lender.
- 3Enter the loan tenure in years.
- 4Press Calculate to see your monthly EMI and complete loan summary.
The formula
The calculation uses a standard, verifiable formula. Here it is in its simplest form.
What each variable means
| Symbol | Name | Description |
|---|---|---|
| P | Principal | The total loan amount you borrow from the lender. |
| r | Monthly interest rate | The annual interest rate divided by 12 months and 100 to get a decimal. |
| n | Number of installments | The loan tenure expressed in months (years × 12). |
Step-by-step example
Example: ₹5,00,000 loan at 8.5% for 20 years
- 1Monthly interest rate = 8.5% / 12 = 0.7083% = 0.007083
- 2Number of installments = 20 × 12 = 240 months
- 3EMI = 5,00,000 × 0.007083 × (1.007083)²⁴⁰ / ((1.007083)²⁴⁰ − 1)
- 4(1.007083)²⁴⁰ ≈ 5.4368
- 5EMI ≈ 5,00,000 × 0.007083 × 5.4368 / 4.4368 ≈ ₹4,339
- 6Total payment = ₹4,339 × 240 = ₹10,41,360
- 7Total interest = ₹10,41,360 − ₹5,00,000 = ₹5,41,360
Result
EMI ≈ ₹4,339 per month
What changes the result
- Higher loan amounts result in higher EMI payments proportionally.
- Higher interest rates increase both the EMI and total interest paid.
- Longer tenures reduce the monthly EMI but increase total interest paid.
- Shorter tenures increase the monthly EMI but reduce total interest paid.
Edge cases to be aware of
Unusual situations handled correctly
- A zero interest rate loan: EMI equals principal divided by tenure months.
- Very small loans or very long tenures may result in EMIs below ₹100.
- Interest rates above 30% are unusual but possible for high-risk loans.
- Loans with step-up or step-down payment structures are not supported.
Common mistakes
Avoid these errors
- Using the annual rate directly in the formula instead of dividing by 12.
- Entering tenure in months when the input expects years.
- Forgetting that the total payment includes both principal and interest.
- Ignoring processing fees and other charges that affect the effective cost.
Assumptions
- The EMI is calculated using the reducing balance method, which is standard for most loans.
- The interest rate is fixed for the entire tenure.
- Payments are made monthly, on time, for the full tenure.
- No prepayment, part-payment or loan restructuring occurs.
Limitations
- The calculator does not include processing fees, insurance, or other charges.
- Floating-rate loans will have EMIs that change with the benchmark rate.
- The actual EMI may differ slightly due to rounding conventions of the lender.
- This is an estimate for planning purposes and not a loan quote from any financial institution.
Key terms to know
Principal+
Interest+
Reducing balance+
Annual Percentage Rate (APR)+
Tenure+
Amortization+
Prepayment+
Fixed rate+
Floating rate+
Real-world scenarios
Short tenure, higher EMI
20 lakh loan at 8.5% for 10 years instead of 20 years.
What it means: The monthly payment is roughly double, but the total interest falls sharply because the principal is repaid sooner. This suits borrowers with higher monthly cash flow who want to minimise total cost.
Long tenure, lower EMI
The same loan spread over 25 years.
What it means: The monthly EMI is lower, which helps cash flow, but total interest can exceed the principal. Many borrowers focus only on the EMI figure and overlook the long-term cost.
Interest rate rise of 0.5%
A floating-rate loan where the rate moves from 8.5% to 9%.
What it means: Each 0.5% rise increases the EMI, or extends the tenure with some lenders. Over 20 years, even a small rate change can add lakhs to total interest, so compare fixed vs floating options carefully.
Annual prepayment
You pay an extra amount equal to two monthly EMIs every year.
What it means: Prepayment directly reduces the principal, which shortens the term and lowers total interest. Even a modest annual prepayment can save a meaningful share of interest, provided there is no penalty.
Related concepts
Total interest vs total payment
Total payment includes both the principal and all the interest charged. The EMI covers both; knowing the split helps you see what borrowing really costs.
Compound interest and growth
The same percentage can work for or against you. Loan interest compounds on the balance; investment growth compounds on what you have saved. Comparing both makes borrowing decisions clearer.
Percentage changes in rates
A 1% rate change looks small but can be significant over years. Understanding percentage increases and decreases is essential when comparing loan offers.
SIP contributions and saving for the down payment
A separate growth calculator can help you plan how much to save each month for a down payment before taking a loan.
What this estimate includes
| Cost item | Included | Description |
|---|---|---|
| Principal repayments | Included | The portion of each EMI reducing the amount you borrowed. |
| Interest on the balance | Included | The monthly cost of borrowing, based on the current outstanding amount. |
| Processing fees | Not included | One-time charges lenders add at disbursement. |
| Insurance premiums | Not included | Optional loan protection policies often sold alongside the loan. |
| Prepayment penalties | Not included | Fees charged if you repay part of the loan early. |
| Late payment fees | Not included | Charges when you miss or delay an EMI. |