Estimate the monthly EMI for a home, car or personal loan. Enter the principal, quoted annual interest rate and tenure to see the monthly instalment, estimated total interest and an amortisation schedule. The estimate assumes a fixed rate and does not include lender fees.
The entered annual rate is treated as a nominal annual rate and converted to a monthly decimal rate: annual rate ÷ 12 ÷ 100.
The loan period in years is changed into the total number of months.
The reducing-balance formula determines a level EMI. At zero interest, the principal is divided evenly across the instalments.
Each month, interest is estimated on the opening balance; the rest of the EMI reduces principal. This is why early EMIs usually have a larger interest share.
EMI: P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
P: Principal loan amount
r: Monthly interest rate = annual rate ÷ 12 ÷ 100
n: Total number of monthly instalments
An EMI calculator estimates the level monthly instalment for a loan on a reducing-balance basis. Enter the principal, quoted annual interest rate and tenure to see the monthly EMI, estimated total interest and an amortisation schedule showing how each payment is split between interest and principal.
Many standard home, car, personal and education loans use a reducing-balance EMI structure, but some products use flat-rate pricing or other repayment terms. Compare the lender's repayment schedule and total charges, not just the EMI, before deciding whether an offer suits your budget. This estimate is for planning and does not replace a lender's written offer or repayment statement.
1. Write down the principal P, the annual interest rate and the tenure in years.
2. Treat the entered rate as a nominal annual rate and convert it to a monthly decimal rate: r = annual rate ÷ 12 ÷ 100. For 9% this model uses 0.0075 per month.
3. Convert the tenure to months: n = years × 12.
4. Compute the growth factor (1 + r)ⁿ. A scientific calculator or a spreadsheet POWER function helps here.
5. Apply the formula EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1).
6. Multiply the EMI by n to get the total amount paid, then subtract P to get the total interest.
7. For any month, interest = outstanding balance × r, and principal repaid = EMI − that interest.
For a fixed monthly rate r greater than zero, the present value of the n end-of-month instalments discounted at that rate equals the principal P. Each payment due k months from now has present value EMI ÷ (1 + r)ᵏ. Summing this geometric series gives P = EMI × (1 − (1 + r)⁻ⁿ) ÷ r. Rearranging gives EMI = P × r ÷ (1 − (1 + r)⁻ⁿ), equivalent to EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1). When r = 0, that formula is not defined; the separate result is EMI = P ÷ n.
Interest each month is charged only on what you still owe. At the start the balance is the full loan, so the interest slice is at its largest and the principal slice is small. As principal is repaid, the balance falls, the interest part shrinks and more of the same EMI goes to principal. On a 20-year home loan at 8.5%, only about a fifth of the EMIs paid in the first year goes to principal. This is also why a prepayment made early saves far more interest than one made near the end.
The calculator treats the entered annual rate as a nominal annual rate, converts it to a monthly rate by dividing by 12, and assumes that rate stays fixed and every EMI is paid on time. A lender may revise the EMI or tenure after a floating-rate change, according to the loan terms. Processing fees, bundled insurance, broken-period interest for a partial first month, and lender-specific rounding are not included. At zero interest, the positive-rate formula is not defined, so the calculator uses EMI = P ÷ n.
Ramesh is buying a flat in Pune and needs a home loan of ₹40,00,000 at 9% a year, which he wants to repay over 15 years.
Loan amount (P): ₹40,00,000
Interest rate: 9% per year
Tenure: 15 years (180 months)
Monthly rate r = 9 ÷ 12 ÷ 100 = 0.0075, and n = 15 × 12 = 180.
Growth factor (1.0075)¹⁸⁰ ≈ 3.838043.
EMI = 40,00,000 × 0.0075 × 3.838043 ÷ (3.838043 − 1) = 30,000 × 1.352361 ≈ ₹40,571.
Total paid = 40,570.66 × 180 ≈ ₹73,02,719, so total interest ≈ ₹73,02,719 − ₹40,00,000 = ₹33,02,719.
In month 1, interest = 40,00,000 × 0.0075 = ₹30,000, so only about ₹10,571 of the first EMI reduces the loan.
Answer: EMI of about ₹40,571 a month, with total interest of about ₹33,02,719 over 15 years.
Using the annual rate directly in the formula instead of dividing it by 12 and by 100 first.
Entering the tenure in years where the formula needs months, which gives an absurdly large EMI.
Comparing a flat-rate quote from a dealer with a reducing-balance EMI from a bank as if they were the same kind of rate.
Ignoring processing fees and bundled insurance, which raise the real cost of the loan above what the EMI alone suggests.
Assuming a floating-rate EMI is fixed; when rates rise, the lender often extends the tenure silently.
Checking whether a home, car or personal loan EMI fits within the monthly budget before applying.
Comparing offers from two lenders at different rates and tenures on the same loan amount.
Deciding between a shorter tenure with a higher EMI and a longer one with more total interest.
Reading the amortisation schedule to plan the timing of prepayments.
Estimating the interest component for a year when planning home loan tax deductions.
What does EMI stand for?
EMI means Equated Monthly Instalment. It is a fixed amount you pay every month. It covers both interest and part of your loan, so the loan is fully paid off by the end.
Why is most of my early EMI going towards interest?
Interest is charged on the amount you still owe, which is highest at the start. As you pay off the loan, the interest part gets smaller, so more of each EMI goes towards your loan amount.
Does prepaying a loan reduce the interest?
Yes. When you prepay, your loan amount goes down. So all future interest is worked out on a smaller amount. Prepaying early in your loan saves much more than prepaying near the end.
Is this EMI the exact amount my bank will charge?
No. This is an estimate using a fixed-rate, monthly reducing-balance model. Your lender's figure can differ because of rate resets, payment dates, day-count conventions, rounding, fees, insurance or other loan terms. Check the lender's repayment schedule before relying on a figure.