EMI Calculator
Equated Monthly Instalment for any loan — personal, car, home, or education.
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What an EMI is and how it is split
An Equated Monthly Instalment is a fixed payment covering both interest and principal repayment, calculated so the loan is fully cleared by the end of the term. The payment stays constant, but its composition does not. In the early months, most of it is interest; by the end, most is principal.
That shift is the most important thing to understand about any loan. On a 20-year home loan, roughly the first seven years of payments go predominantly toward interest. It is why paying a little extra in the early years saves so much more than the same extra paid later, and why the total interest figure below often surprises people more than the monthly figure does.
The formula
EMI = P × r × (1 + r)n / ((1 + r)n − 1)
Where P is the principal, r is the monthly interest rate (annual rate divided by 12, then by 100), and n is the tenure in months. Every bank and NBFC uses this formula, so your sanctioned EMI should match this calculation for the same three inputs.
A worked example
Borrow 10,00,000 at 9.5% for five years. The EMI comes to about 21,002, and across 60 payments you will repay roughly 12,60,100 — meaning 2,60,100 of interest on a 10,00,000 loan.
Now stretch the same loan to ten years. The EMI falls to about 12,940, which feels much more comfortable. But you will pay approximately 15,52,800 in total, so the interest has more than doubled to 5,52,800. A longer tenure buys affordability with a substantial amount of money. Use the tenure slider to find the shortest term whose EMI you can actually sustain — not the longest term available.
What affects the rate you are offered
- Credit score. The single largest lever. A score above 750 typically unlocks the advertised rate; below 650 often means a materially higher one or rejection.
- Loan type. Secured loans against property or a vehicle carry lower rates than unsecured personal loans, because the lender has recourse if you default.
- Income stability and existing obligations. Most lenders want total EMIs across all your loans to stay under roughly 40–50% of net monthly income.
- Fixed versus floating. Floating rates move with the lender's benchmark. This calculator assumes a constant rate, so a floating-rate loan's actual cost will drift from the projection.
Costs this calculator excludes
The EMI shown covers principal and interest only. Your real cost of borrowing also includes a processing fee (typically 0.5–2% of the loan), documentation and legal charges, mandatory insurance on some products, and prepayment or foreclosure penalties where applicable. Ask any lender for the annual percentage rate rather than the interest rate, since the APR is required to include most fees and is the only figure that lets you compare offers fairly.
Frequently asked questions
How is EMI calculated?
Using the standard amortisation formula: EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the principal, r is the monthly interest rate, and n is the number of months. The payment stays fixed while the split between interest and principal shifts over the term.
Does a longer tenure reduce the total cost?
No, it increases it. A longer tenure lowers the monthly payment but means you are borrowing the money for longer, so total interest rises — often dramatically. Doubling a five-year loan to ten years typically more than doubles the interest paid.
Can I reduce my EMI later?
Sometimes. Options include prepaying a lump sum to reduce the principal, refinancing to a lender offering a lower rate, or requesting a tenure extension — though the last one lowers the payment while increasing total interest.
What is a good EMI to income ratio?
Most lenders cap total EMI obligations at 40–50% of net monthly income. As a personal benchmark, staying below 40% leaves room for savings and unexpected expenses; going much beyond 50% leaves a household fragile to any income disruption.
Is prepaying a loan worth it?
Usually yes, particularly in the early years when most of each payment is interest. Check for foreclosure charges first — floating-rate loans to individuals generally cannot carry prepayment penalties in India, but fixed-rate loans often can.
What happens if I miss an EMI?
You will be charged a late fee and penal interest, and the missed payment is reported to credit bureaus, which damages your score. Repeated defaults can lead to the loan being classified as non-performing and, for secured loans, to recovery action against the asset.