What is the EMI formula?

EMI = P × r × (1+r)^n / ((1+r)^n − 1). Where: P = principal loan amount, r = monthly interest rate (annual rate ÷ 12 ÷ 100), n = total number of months. Example: ₹50 lakh home loan at 8.5% for 20 years: r = 8.5/12/100 = 0.007083, n = 240 months. EMI = 50,00,000 × 0.007083 × (1.007083)^240 / ((1.007083)^240 − 1) = ₹43,391/month.

What is the EMI for a ₹10 lakh home loan at 8.5% for 20 years?

The EMI for a ₹10 lakh (₹10,00,000) home loan at 8.5% annual interest for 20 years is approximately ₹8,678 per month. Total amount paid over 20 years = ₹20,82,720. Total interest = ₹10,82,720 (more than the original loan amount, which is typical for long-tenure loans).

What happens if I make prepayments on my loan?

Prepayment (part-payment) reduces your outstanding principal, which in turn reduces the interest for future months. You can either keep the EMI the same and reduce tenure, or reduce the EMI and keep the tenure. Reducing tenure saves more total interest. Most banks allow partial prepayments on floating-rate home loans without penalty. Fixed-rate loans may have a 2–3% prepayment charge.

How much home loan EMI can I afford?

A common rule of thumb is that your total EMI obligations (all loans combined) should not exceed 40–50% of your net monthly income. For a home loan specifically, most banks limit the EMI to 40–45% of your net income. Example: if your net income is ₹80,000/month, your home loan EMI should ideally not exceed ₹32,000–36,000. Use this calculator to find a loan amount that keeps your EMI within this range.

What is the difference between flat rate and reducing balance EMI?

Flat rate: interest is calculated on the original principal throughout the tenure. Reducing balance: interest is calculated on the outstanding principal each month. Flat rate loans have lower stated interest rates but higher effective costs. Example: a 10% flat rate loan is equivalent to approximately 18–19% in reducing balance terms. Always compare loans using reducing balance (effective) rates, not flat rates. All modern Indian bank loans use reducing balance.

EMI Calculator

Home Loan · Car Loan · Personal Loan · Compound Interest

Calculate your monthly EMI for any loan. Enter the loan amount, interest rate and tenure to instantly see your monthly payment, total interest payable and principal vs interest split.

EMI = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1) | r = annual rate ÷ 12 ÷ 100 | n = months

Loan EMI Calculator

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Compound Interest Calculator

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How EMI Works

An EMI is a fixed monthly payment that repays a loan in equal instalments over its tenure. Each payment covers both interest (calculated on the outstanding principal) and principal repayment. In early months, the interest share is higher; as the principal reduces over time, more of each EMI goes toward repayment. The total payment is always EMI × number of months.

🏠 Home Loan EMI

Home loans in India typically run for 15–30 years at 8–10% per annum. For a ₹50 lakh loan at 8.5% for 20 years, EMI = ₹43,391. Total payment = ₹1.04 crore — more than double the principal, which is why prepayments early in the tenure save significant interest. SBI, HDFC, LIC HFL and ICICI are the major home loan lenders, all using reducing balance method.

🚗 Car & Personal Loan EMI

Car loans run for 3–7 years at 7–12% p.a. Personal loans are 1–5 years at 10–24% p.a. — shorter tenure but much higher rates mean significant interest costs. For a ₹5 lakh personal loan at 15% for 3 years, EMI = ₹17,333 and total interest = ₹1.24 lakh. Always compare the effective annual rate (EAR) across lenders, not just the advertised flat rate.

Worked Examples

Home Loan — 20 Years

₹50L @ 8.5% → ₹43,391/mo

n = 240 months · r = 0.7083%/mo
Total payment: ₹1,04,13,840
Total interest: ₹54,13,840
Interest = 108% of principal

Car Loan — 5 Years

₹8L @ 9% → ₹16,607/mo

n = 60 months · r = 0.75%/mo
Total payment: ₹9,96,420
Total interest: ₹1,96,420
Interest = 24.6% of principal

Personal Loan — 3 Years

₹5L @ 15% → ₹17,333/mo

n = 36 months · r = 1.25%/mo
Total payment: ₹6,23,988
Total interest: ₹1,23,988
Interest = 24.8% of principal

Education Loan — 7 Years

₹10L @ 11% → ₹17,028/mo

n = 84 months · r = 0.9167%/mo
Total payment: ₹14,30,352
Total interest: ₹4,30,352
Interest = 43% of principal

Who Uses an EMI Calculator?

🏠

Home Buyers

Calculate affordable loan amounts by working backwards from a target EMI. Compare 15 vs 20 vs 25 year tenures to understand the interest cost tradeoff vs monthly burden.

🚗

Car Buyers

Compare dealer finance offers vs bank loans. See the total interest cost to decide if a 0% EMI scheme (which often has a higher base price) is actually cheaper.

🏦

Loan Officers & Bankers

Quickly verify EMI calculations for clients, cross-check processing systems, and explain the principal vs interest breakdown to borrowers during loan counselling.

📊

Financial Planners

Model debt repayment scenarios for clients, check if existing loan obligations fit within the 40–50% EMI-to-income ratio, and plan prepayment strategies.

🎓

Students Taking Education Loans

Understand the repayment burden before committing to a loan. Calculate EMI for the post-moratorium repayment period and compare it against expected starting salary.

🔄

Loan Balance Transfer Applicants

Compare the new EMI after balance transfer at a lower rate against current EMI. Calculate total savings vs transfer costs to decide if the switch is worthwhile.

Mental Math Tips for EMI

Rule of thumb: ₹1 lakh loan ≈ ₹1,000/mo per 1% rate (10-yr)

For a 10-year loan at ~10% p.a., EMI is roughly ₹1,320 per ₹1 lakh. At 8%, about ₹1,213. This quick estimate works well for ballpark checks — multiply by your loan amount in lakhs.

Doubling tenure doesn't halve the EMI

Going from 10 to 20 years reduces EMI by only ~30%, not 50%, because you're paying interest for twice as long. ₹50L at 8.5%: 10yr EMI = ₹61,993; 20yr EMI = ₹43,391. But total interest doubles — so shorter tenures save more money overall.

1% rate cut saves significant interest on large loans

On a ₹50L home loan over 20 years, a 1% rate reduction (8.5% → 7.5%) saves ₹6,000/month in EMI and over ₹14 lakh in total interest. This is why balance transfers or rate renegotiations with your bank are worth pursuing.

Related Finance Calculators

🏠 Mortgage Calculator 📈 Compound Interest 📈 SIP Calculator ⚖️ Loan Comparison

Frequently Asked Questions — EMI Calculator

EMI (Equated Monthly Instalment) is the fixed monthly payment you make to repay a loan over its tenure. Each EMI has two components: principal repayment and interest. Early in the loan tenure, interest forms the larger share; over time, more of each payment goes toward reducing the principal. The EMI stays constant throughout, making budgeting predictable.

EMI = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1). Where: P = principal loan amount, r = monthly interest rate (annual rate ÷ 12 ÷ 100), n = total number of months. Example: ₹50 lakh at 8.5% for 20 years — r = 0.007083, n = 240 — gives EMI = ₹43,391/month.

The EMI is approximately ₹8,678 per month. Total payment over 20 years = ₹20,82,720. Total interest = ₹10,82,720 — more than the original loan amount. This is typical for long-tenure home loans, which is why prepayments early in the tenure can save lakhs.

In the reducing balance method (used by all Indian banks), interest is charged only on the outstanding principal each month — not the original loan amount. As you pay EMIs, the principal reduces, so the interest component of each EMI decreases over time while the principal component increases. This is always more beneficial than flat-rate loans.

Prepayment reduces your outstanding principal, which reduces interest for future months. You can either keep EMI the same and reduce tenure (saves more total interest), or reduce EMI and keep tenure. Most banks allow partial prepayments on floating-rate home loans without penalty. Fixed-rate loans may have a 2–3% prepayment charge.

A common rule is that total EMI obligations should not exceed 40–50% of your net monthly income. Example: net income ₹80,000/month → home loan EMI should ideally not exceed ₹32,000–36,000. Banks typically cap loan eligibility at 40–45% EMI-to-income ratio. Use this calculator to find a loan amount that fits your budget.

Flat rate: interest is calculated on the original principal throughout — lower stated rate but higher effective cost. Reducing balance: interest is on outstanding principal, decreasing over time. A 10% flat rate is equivalent to approximately 18–19% reducing balance. Always compare loans using the effective annual rate, not the flat rate. All modern Indian bank loans use reducing balance.

⚠️ Disclaimer: This calculator is for educational and informational purposes only. Results are estimates based on the inputs provided and standard financial formulas. Actual returns, tax liability, or costs may vary based on market conditions, applicable laws, and individual circumstances. This does not constitute financial, investment, or tax advice. Please consult a qualified financial advisor or Chartered Accountant before making financial decisions.