EMI Calculator
Press Calculate to see the results.
Enter the loan amount, annual interest rate and tenure to see the equated monthly instalment (EMI) a bank would charge, how much of what you repay is interest, and how the balance falls year by year.
What Is an EMI?
An equated monthly instalment is the fixed amount you pay your lender every month until a loan is fully repaid. Each EMI contains two parts: interest on the balance still outstanding and a repayment of principal. Because the balance shrinks every month, the interest part falls and the principal part grows, even though the EMI itself stays the same.
The same arithmetic applies to a home loan, a car loan or a personal loan; only the typical rate and tenure differ. Home loans commonly run 15 to 30 years, car loans up to about 7 years and personal loans 1 to 5 years, so this one tool works as a home loan EMI calculator, a car loan EMI calculator or a general loan EMI calculator.
How to Use the EMI Calculator
Type the amount you plan to borrow, the annual interest rate quoted in the sanction letter or on the lender's website, and the tenure. Use the unit picker next to tenure to enter it in years or in months; a car loan quoted as 60 months and a house loan quoted as 20 years both work.
The results show the EMI, the total interest over the life of the loan and the total amount you will pay. The chart tracks the outstanding balance against interest paid so far, and the yearly schedule lists how much principal and interest you pay in each loan year and the balance left at the end of it.
- Comparing banks: run the calculator once per quoted rate. For an SBI home loan EMI, for example, enter SBI's current rate for your profile; the formula is the same one every bank uses.
- Comparing tenures: keep the amount and rate fixed and change only the tenure to see the trade-off between a lower EMI and a larger interest bill.
- The EMI excludes processing fees, insurance and other charges, which lenders bill separately.
How the EMI Is Calculated
Worked example using the default values: a loan of ₹10,00,000 at 8.5% a year for 20 years. The monthly rate is r = 8.5 ÷ 12 ÷ 100 = 0.0070833 and the tenure is n = 240 months. Then (1 + r)ⁿ = 5.4412, so EMI = 10,00,000 × 0.0070833 × 5.4412 ÷ 4.4412 = ₹8,678.
Over 240 months you pay 240 × ₹8,678.23 = ₹20,82,776, of which ₹10,82,776 is interest, about 52% of everything you repay. In the first month the interest is 10,00,000 × 0.0070833 = ₹7,083, so only ₹1,595 of that first EMI reduces the principal. Across the whole first year you pay ₹84,236 in interest and ₹19,902 in principal, leaving ₹9,80,098 outstanding.
EMI = P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1]
- P
- loan amount (principal)
- r
- monthly interest rate, the annual rate divided by 12 and by 100
- n
- tenure in months
Indian banks and housing finance companies charge interest on the monthly reducing balance, so each EMI's interest is the outstanding balance times r and the rest of the EMI repays principal. At 0% interest the EMI is simply P ÷ n.
Tenure, Rate and Total Interest
A longer tenure lowers the EMI but raises the total interest sharply, because the balance stays high for longer. For the same ₹10,00,000 at 8.5%, the figures compare as follows.
- Stretching from 20 to 25 years cuts the EMI by only ₹626 but adds about ₹3.3 lakh of interest.
- Half a percentage point matters: at 9% the 20-year EMI is ₹8,997 and total interest ₹11,59,342, about ₹77,000 more than at 8.5%.
| Tenure | Monthly EMI | Total Interest |
|---|---|---|
| 15 years | ₹9,847 | ₹7,72,531 |
| 20 years | ₹8,678 | ₹10,82,776 |
| 25 years | ₹8,052 | ₹14,15,681 |
Floating Rates and Prepayment
Most Indian home loans carry a floating rate linked to an external benchmark such as the RBI repo rate. When the rate is reset, the lender either changes the EMI or keeps it and changes the remaining tenure. Reserve Bank of India guidelines require lenders to explain this choice to borrowers and to let them opt for a higher EMI, a longer tenure or a combination at a reset.
RBI rules also bar banks from charging foreclosure or prepayment penalties on floating-rate term loans taken by individuals for purposes other than business. Paying extra in the early years, when the interest portion of each EMI is largest, removes the most future interest. Fixed-rate loans and loans to businesses may carry prepayment charges, so check the loan agreement.
Frequently asked questions
How is EMI calculated on a home loan?
Banks use EMI = P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1], where P is the loan amount, r the monthly rate (annual rate ÷ 12 ÷ 100) and n the number of months. A ₹10,00,000 loan at 8.5% for 20 years gives an EMI of about ₹8,678.
Does a car loan EMI use the same formula?
Yes, for a standard reducing-balance car loan. Enter the on-road amount you are financing after the down payment and the tenure in months. Some dealers quote flat rates, which charge interest on the original amount throughout and cost more than the same headline reducing-balance rate.
Is it better to choose a shorter or longer tenure?
A shorter tenure means a higher EMI but much less total interest. A longer tenure eases the monthly budget but costs more overall. Many borrowers pick a tenure whose EMI fits comfortably and then prepay when they can.
Why does most of my early EMI go to interest?
Interest each month is charged on the outstanding balance, which is largest at the start. As principal is repaid the interest part shrinks, so later EMIs repay principal much faster. The yearly schedule above shows this shift.
Does the EMI change if the repo rate changes?
On a floating-rate loan, a change in the benchmark passes through to your rate at the next reset. The lender then adjusts the EMI, the remaining tenure or both. On a fixed-rate loan the EMI stays the same for the fixed period.
Results are estimates for educational purposes and are not financial, tax or legal advice. Confirm figures with a qualified professional or your lender.
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