How to use the EMI Calculator
- Enter the loan amount you plan to borrow, not the price of the asset. Subtract your down payment first.
- Enter the yearly interest rate quoted by the lender, for example 8.5.
- Enter the tenure in years. Use decimals for part years, so 7.5 means 7 years and 6 months.
- Read your monthly EMI, then compare the total interest across different tenures and rates.
Formula used
EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where P is the loan amount, r is the monthly interest rate (yearly rate ÷ 12 ÷ 100) and n is the number of monthly instalments (years × 12).
Worked example
Here is the EMI Calculator worked through with the example values shown above, so you can check each step by hand.
| Inputs | |
|---|---|
| Loan amount | ₹10,00,000 |
| Interest rate (per year) | 8.5 % |
| Loan tenure | 20 years |
| Result | |
| Monthly EMI | ₹8,678 |
| Principal amount | ₹10,00,000 |
| Total interest | ₹10,82,776 |
| Total payment | ₹20,82,776 |
Statement: first six months
This is how the first instalments split between interest and principal for the default loan. Interest is highest at the start, so early payments repay the loan slowly.
| Month | EMI | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | ₹8,678 | ₹7,083 | ₹1,595 | ₹9,98,405 |
| 2 | ₹8,678 | ₹7,072 | ₹1,606 | ₹9,96,799 |
| 3 | ₹8,678 | ₹7,061 | ₹1,618 | ₹9,95,181 |
| 4 | ₹8,678 | ₹7,049 | ₹1,629 | ₹9,93,552 |
| 5 | ₹8,678 | ₹7,038 | ₹1,641 | ₹9,91,912 |
| 6 | ₹8,678 | ₹7,026 | ₹1,652 | ₹9,90,260 |
Year-by-year loan statement
| Year | Interest paid | Principal repaid | Closing balance |
|---|---|---|---|
| 1 | ₹84,236 | ₹19,902 | ₹9,80,098 |
| 2 | ₹82,477 | ₹21,661 | ₹9,58,436 |
| 3 | ₹80,563 | ₹23,576 | ₹9,34,860 |
| 4 | ₹78,479 | ₹25,660 | ₹9,09,200 |
| 5 | ₹76,211 | ₹27,928 | ₹8,81,272 |
| 6 | ₹73,742 | ₹30,397 | ₹8,50,875 |
| 7 | ₹71,055 | ₹33,084 | ₹8,17,791 |
| 8 | ₹68,131 | ₹36,008 | ₹7,81,784 |
| 9 | ₹64,948 | ₹39,191 | ₹7,42,593 |
| 10 | ₹61,484 | ₹42,655 | ₹6,99,938 |
| 11 | ₹57,714 | ₹46,425 | ₹6,53,513 |
| 12 | ₹53,610 | ₹50,529 | ₹6,02,985 |
| 13 | ₹49,144 | ₹54,995 | ₹5,47,990 |
| 14 | ₹44,283 | ₹59,856 | ₹4,88,134 |
| 15 | ₹38,992 | ₹65,147 | ₹4,22,987 |
| 16 | ₹33,234 | ₹70,905 | ₹3,52,082 |
| 17 | ₹26,966 | ₹77,172 | ₹2,74,910 |
| 18 | ₹20,145 | ₹83,994 | ₹1,90,916 |
| 19 | ₹12,721 | ₹91,418 | ₹99,498 |
| 20 | ₹4,640 | ₹99,498 | ₹0 |
Figures use the default loan above and are rounded to the nearest rupee.
What your EMI is made of
Every EMI has two parts: interest on the outstanding balance and a repayment of principal. The EMI stays the same each month, but the mix changes. In the early months most of the payment is interest, and over time more of it goes to principal. This is called the reducing-balance method, and it is what most Indian banks use for home, car and personal loans.
Take the default example of ₹10,00,000 at 8.5% for 20 years. The EMI is ₹8,678. In the very first month the interest is ₹10,00,000 × 8.5% ÷ 12, which is about ₹7,083, so only about ₹1,595 of that first EMI reduces your loan. Over the full 20 years you pay ₹10,82,776 in interest, so the total repayment is ₹20,82,776, roughly twice the amount you borrowed.
How tenure changes what you pay
A longer tenure lowers the EMI but raises the total interest sharply. For ₹10,00,000 at 8.5%, a 10-year loan has an EMI of ₹12,399 and total interest of ₹4,87,828. A 15-year loan costs ₹9,847 a month with ₹7,72,531 interest. At 20 years the EMI is ₹8,678 with ₹10,82,776 interest, and at 25 years it is ₹8,052 with ₹14,15,681 interest.
Moving from 20 years to 15 years raises the monthly payment by about ₹1,169 but saves about ₹3,10,245 in interest. If your budget allows it, choosing the shortest tenure you can comfortably afford is usually the cheapest option.
How the interest rate changes your EMI
Small differences in rate matter on long loans. On a ₹10,00,000 loan over 20 years, the EMI is ₹8,364 at 8%, ₹8,678 at 8.5%, ₹8,997 at 9% and ₹9,650 at 10%. Each extra half percentage point adds roughly ₹315 to the monthly payment here. Between 8% and 9% the total interest differs by about ₹1,51,886.
Most home loans are linked to an external benchmark and can change when the benchmark moves, so your actual EMI or your tenure may change over the life of the loan. Use this calculator to test a rate a little higher than today’s to see whether you would still be comfortable.
Practical tips before you borrow
Many lenders and planners suggest keeping the total of all your EMIs well below about 40% of your take-home income, so that an emergency or a rate rise does not strain your budget. Treat this as a rule of thumb, not a rule, and consider your other commitments.
Prepaying part of the loan early reduces the principal on which interest is charged and can cut the tenure or the EMI. Ask the lender about prepayment rules and charges, because they differ by loan type. Also remember that processing fees, insurance and other charges are extra and are not included in the EMI shown here.
Frequently asked questions
How is EMI calculated?
EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where P is the loan amount, r is the monthly interest rate (yearly rate ÷ 12 ÷ 100) and n is the number of monthly instalments. This calculator applies exactly that formula.
Why is my bank’s EMI slightly different from this calculator?
Banks may round the EMI, count days differently for the first month, or add fees and insurance. The difference is usually small. Ask your lender for the repayment schedule to see the exact figures.
Is a longer tenure better?
A longer tenure gives a lower EMI, which helps cash flow, but you pay much more interest overall. For example, extending ₹10,00,000 at 8.5% from 15 to 25 years lowers the EMI from ₹9,847 to ₹8,052 but raises total interest from ₹7,72,531 to ₹14,15,681.
What is the difference between a fixed and a floating rate EMI?
With a fixed rate the EMI stays the same for the fixed period. With a floating rate the lender can change the rate when its benchmark changes, which can change your EMI or the remaining tenure. This calculator assumes one constant rate for the whole loan.
Does the EMI include processing fees and insurance?
No. The EMI covers only principal and interest. Processing fees, loan insurance, stamp duty and other charges are billed separately by the lender or other parties.
Can I use this for a car loan or personal loan?
Yes. The same reducing-balance formula applies to home, car, personal and education loans. Some products, such as flat-rate loans, quote interest differently, so check whether your lender quotes a reducing-balance rate.
This calculator gives estimates for information only. Actual figures from a bank, employer, tax authority or doctor may differ. It is not financial, tax, legal or medical advice.