Loan EMI Calculator

📌 What is EMI?

EMI (Equated Monthly Instalment) is the fixed payment you make every month towards a loan. Each EMI includes both the interest due for that month and a portion of the principal. Your EMI amount stays the same throughout the tenure (unless your lender changes the rate or tenure), but the composition changes: early EMIs are interest-heavy, later EMIs are principal-heavy.

📈 Typical Rates (India, 2025)

Disclaimer: Rates vary by lender and profile. Always check the sanction letter and effective APR including fees and taxes.

🔍 How the EMI formula works

The EMI formula spreads a loan into equal instalments using a reducing-balance method called amortization. We convert your annual interest rate to a monthly rate (r = annual ÷ 12 ÷ 100) and your tenure to months (n). The standard formula is:

EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)

Here, P is principal, r is the monthly rate, and n is the number of months. Early in the tenure, the outstanding principal is high, so the interest component of the EMI is high. As the balance falls, the interest component shrinks and more of your EMI goes into reducing principal. Because interest accrues on the remaining balance, prepaying earlier saves more than prepaying later.

🧮 Worked example (step by step)

Imagine you borrow ₹10,00,000 at an annual rate of 9% for 20 years. The monthly rate is 0.75% and the tenure is 240 months. Plugging into the formula gives an EMI of about ₹8,997. Over 240 months, your total interest is roughly ₹11,59,342, so the total payout is about ₹21,59,342. If you add an extra ₹2,000 as a monthly prepayment, your schedule shortens and the interest paid falls—enter your numbers above to see the exact savings and the new payoff date.

📊 Quick reference examples (for sanity checks)

These are illustrative and rounded to help you cross-check quickly. Your exact results will depend on bank rounding, date-of-drawdown, and fee treatment.

⚙️ What actually changes your EMI?

• Interest rate: Even a 0.25% change can move your EMI materially on long tenures.
• Tenure: Longer tenure = lower EMI but more total interest; shorter tenure = higher EMI but less total interest.
• Loan amount: EMI scales roughly linearly with principal if rate and tenure are unchanged.
• Fees & charges: Processing, insurance, and documentation can be paid upfront or capitalized—ask how your lender treats them.
• Prepayments: Lump sums or small monthly extras reduce outstanding principal faster and cut total interest.

📌 Fixed vs floating rate loans

Fixed-rate loans keep the same interest rate for an agreed period, so EMI remains constant (unless there are step-up/step-down structures). Floating-rate loans are linked to benchmarks (like RLLR). When rates rise, lenders may increase EMI or extend tenure; when rates fall, EMI may reduce or tenure may shorten. Our calculator assumes a constant rate for clarity—simulate scenarios by changing the rate field.

💡 Smart ways to pay off faster

• Round up your EMI: If EMI is ₹18,450, pay ₹19,000—small extras compound into big interest savings.
• Use windfalls: Bonuses, refunds, or gifts work well as early lump-sum prepayments.
• Refinance when it makes sense: If a competing lender offers meaningfully lower rates, compare switching costs versus savings.
• Biweekly strategy: Paying half-EMI every two weeks roughly equals 13 EMIs/year, shaving tenure (confirm acceptance with your lender).

🏠 Home, 🚗 Car, and 💳 Personal loans: what to include

Home loans: Consider insurance premiums (if bundled), processing fees, legal/valuation charges. Car loans: EMI should be based on the financed portion after down payment; include on-road price components like road tax, insurance, and dealer fees in your planning. Personal loans: Watch origination fees and pre-closure conditions; these impact effective cost even when the EMI looks affordable.

📝 Understanding the amortization schedule

Your schedule lists every month’s payment with the interest and principal split plus the remaining balance. Early rows show high interest; later rows show higher principal. Download the PDF/CSV to plan prepayments: mark the months you can add extra and observe how the payoff date advances and interest shrinks.

🧭 How to use this EMI Calculator effectively

1. Enter your loan amount, annual interest rate, and tenure (years or months).
2. Click Calculate EMI to see monthly EMI, total interest, and total payment.
3. Open the Amortization Schedule to view the full month-by-month breakdown.
4. Try an Extra Monthly Prepayment to instantly see interest saved and tenure reduction.
5. Download PDF/CSV for documentation or Copy/Share the prefilled link with your advisor/family.

⚖️ Assumptions & limitations

This tool assumes a reducing-balance loan with a constant interest rate for the whole tenure. It does not model interest-only periods, step-up/step-down EMIs, teaser rates, interim disbursements, or changing fees. Always review the final sanction letter, schedule of charges, and applicable taxes before signing.

📚 Glossary (quick definitions)

• Principal: The amount you borrow.
• Interest: The cost of borrowing charged on the outstanding principal.
• EMI: Equated Monthly Instalment—fixed monthly payment covering interest and principal.
• Tenure: Total length of the loan in months/years.
• Amortization: Paying off a loan in regular instalments that reduce the balance over time.