How it works
An EMI (equated monthly instalment) is the fixed amount you pay every month until a loan is cleared. Each payment covers that month’s interest on the outstanding balance, and the rest reduces the principal.
Because interest is charged on what you still owe, the early instalments are mostly interest and the later ones are mostly principal. That is why the year-by-year table shows interest shrinking over time.
This calculator assumes a reducing-balance loan with the rate you enter, which is how most home, car and personal loans from banks are quoted.
The formula
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly instalments.
A worked example
A loan of ₹10,00,000 at 10% a year for 10 years (120 months) has a monthly rate of 0.8333%. The EMI works out to about ₹13,215. Over 120 months you pay about ₹15,85,809 in total, of which about ₹5,85,809 is interest.
Frequently asked questions
Does the EMI include processing fees or insurance?
No. The calculator covers principal and interest only. Processing fees, insurance and other charges are separate and depend on the lender.
What is the difference between a flat rate and a reducing rate?
A reducing rate charges interest on the balance you still owe. A flat rate charges interest on the original amount for the whole tenure, so the real cost is higher than the number suggests. This calculator uses a reducing rate. If a lender quotes a flat rate, ask for the equivalent reducing rate.
What happens if I prepay part of the loan?
This calculator does not model prepayments. Paying extra reduces the balance, so less interest is charged afterwards. Depending on the lender, you either shorten the tenure or lower the EMI.
Why does my lender’s EMI differ slightly?
Lenders may round differently, count days instead of months, or change the rate on floating-rate loans. Treat this as a close estimate and use your lender’s schedule for the exact figure.