What is an EMI?
EMI stands for equated monthly instalment. It is the fixed amount you pay your lender every month until a loan is fully repaid. Each EMI has two parts: interest on the balance you still owe, and a repayment of principal.
Because interest is charged on the outstanding balance, early EMIs are mostly interest and later ones are mostly principal. The payment stays the same while the split changes every month. The yearly schedule below the calculator shows this clearly.
How to use this EMI calculator
- Enter the loan amount you plan to borrow.
- Enter the annual interest rate quoted by your lender.
- Enter the tenure and choose whether it is in years or months.
- Press Calculate to see the EMI, total interest, total payment and the repayment schedule. Change any value and the results update.
The EMI formula
EMI = P x r x (1 + r)^n / ((1 + r)^n - 1), where P is the loan amount, r is the monthly interest rate (annual rate divided by 12 and by 100) and n is the number of monthly payments. If the rate is zero, the EMI is simply P divided by n.
Example: a loan of 500,000 at 10% a year for 5 years has r = 0.00833 and n = 60. The EMI is about 10,624 a month, the total payment is about 637,411 and the total interest is about 137,411.
How to lower your EMI or your total interest
- Choose a longer tenure to lower the EMI, but remember that you will pay more interest overall.
- Choose a shorter tenure to pay less interest, if you can afford the higher EMI.
- Make a larger down payment so you borrow less.
- Compare offers from several lenders. Even a 0.5% lower rate adds up over many years.
- Prepay part of the principal when you have spare cash. Check first whether your lender charges a prepayment fee.
Flat rate vs reducing balance
This calculator uses the reducing-balance method, where interest is charged only on what you still owe. Some lenders advertise a flat rate, where interest is charged on the original amount for the whole term. A flat rate looks lower, but costs more in practice, so ask for the reducing-balance (APR) rate before comparing offers.
The calculator does not include processing fees, insurance, late charges or rate changes on floating-rate loans.
How tenure changes the EMI (loan of 500,000 at 10% a year)
| Tenure | Monthly EMI | Total interest |
|---|---|---|
| 3 years | 16,134 | 80,809 |
| 5 years | 10,624 | 137,411 |
| 10 years | 6,608 | 292,905 |
Frequently Asked Questions
How is EMI calculated?
EMI = P x r x (1 + r)^n / ((1 + r)^n - 1), using the loan amount, the monthly interest rate and the number of monthly payments.
Does a longer tenure reduce my EMI?
Yes, the monthly payment drops, but you pay interest for more months, so the total interest is higher.
Can I use this for home, car and personal loans?
Yes. Any loan repaid in equal monthly instalments uses the same formula.
Does the calculator include processing fees?
No. Add fees separately, because lenders charge them in different ways.
What is the difference between EMI and interest?
The EMI is your whole monthly payment. Interest is only one part of it, and the rest repays the principal.
Is my data stored?
No. The calculation runs in your browser, so the numbers you enter are not sent to our server.