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
Every EMI has two parts: interest on the loan balance you still owe, and a chunk that pays down the principal. Interest is charged on the reducing balance, so your early EMIs are mostly interest and the later ones 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). 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 year for 20 years. That gives a monthly rate r = 0.0075 and n = 240 instalments:
EMI = 50,00,000 × 0.0075 × (1.0075)²⁴⁰ / ((1.0075)²⁴⁰ − 1) ≈ ₹44,986 per month
Over 20 years you would pay about ₹1.08 crore in total, of which roughly ₹58 lakh is interest — more than the principal itself. Small rate differences matter: at 8.5% instead of 9%, the EMI falls to about ₹43,391, saving roughly ₹3.8 lakh in interest.
Smart borrowing tips for India
- Keep all your EMIs under 40% of income. Lenders go by this rule too. Crossing it hurts your approval chances and squeezes your monthly budget.
- A shorter tenure saves lakhs. A 15-year loan instead of 20 raises the EMI but cuts total interest sharply. Pick the shortest tenure whose EMI fits your budget comfortably.
- Prepay when you can. Floating-rate home loans in India have no prepayment penalty. Paying just one extra EMI a year can cut 4–5 years off a 20-year loan.
- Read the fine print. Processing fees (0.25–1%), prepayment charges on fixed-rate loans and insurance bundled with the loan all add to the real cost. This calculator covers only principal and interest.
- Build your CIBIL score. A score above 750 usually gets you the best advertised rates. Below 650, you may pay 1–2% more or get rejected.
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 balance you still owe, and a part that reduces the principal. Early EMIs are mostly interest; later ones are mostly principal.
How can I reduce my loan EMI?
Pick a longer tenure (though you will pay more total interest), negotiate a lower interest rate, make a bigger down payment, or improve your CIBIL score before applying so lenders offer you better rates.
Should I choose a fixed or floating interest rate?
A fixed rate keeps your EMI the same for the whole tenure, which is reassuring. A floating rate moves with market rates — your EMI usually starts lower but can rise. Over long home loan tenures, floating rates have historically ended up cheaper.
Does prepaying my loan save money?
Yes — a lot. Because interest is charged on the reducing balance, paying even one extra EMI a year can cut years off a home loan and save lakhs in interest. Most floating-rate home loans in India have no prepayment penalty.
What affects the interest rate I am offered?
Your CIBIL credit score, income stability, loan-to-value ratio (how much of the property's value you borrow), tenure and the lender's own policies all play a part. A CIBIL score above 750 usually gets you the best advertised rates.
Is EMI calculated on a reducing balance in India?
Yes. RBI rules require banks and NBFCs to charge interest on the reducing (diminishing) balance — that is, only on the principal you still owe each month. This calculator uses the same reducing-balance method.