Finance

EMI Calculator

Estimate your monthly loan instalment (EMI), total payment, and total interest for any loan amount, interest rate, and tenure.

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Enter loan amount, annual interest rate, and tenure to calculate EMI.

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EMI Formula Explained

The EMI formula uses compound interest to calculate a constant monthly payment that fully repays both principal and interest over the loan tenure.

EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

  • P = Principal loan amount
  • r = Monthly interest rate = Annual rate ÷ 12 ÷ 100
  • n = Loan tenure in months

Example: ₹5,00,000 at 10% p.a. for 5 years → r = 0.10/12 ≈ 0.00833, n = 60 → EMI ≈ ₹10,624/month

How EMI Repayment Works Over Time

Each EMI payment is the same amount throughout the loan, but its composition changes over time. In the early months, a larger share goes toward interest because the outstanding principal is high. As the principal reduces, the interest component of each EMI shrinks and more goes toward repaying principal.

This is called an amortising loan. The total interest paid over the life of the loan can be significantly more than the principal borrowed — especially for long tenures or high interest rates. For example, a ₹30 lakh home loan at 9% for 20 years results in roughly ₹32 lakh in total interest, nearly doubling the effective cost.

Comparing total repayment (EMI × n) — not just the monthly payment — is the most reliable way to evaluate loan affordability and choose between offers.

Frequently asked questions

What is EMI?
EMI (Equated Monthly Instalment) is a fixed payment made each month to repay a loan over a set tenure. Each EMI covers both principal repayment and interest charges, so the outstanding balance reduces with every payment.
How is EMI calculated?
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of monthly instalments.
Does a shorter loan tenure reduce total interest paid?
Yes. A shorter tenure means fewer EMIs, so less interest accrues overall. However, each individual EMI will be higher. A longer tenure lowers the monthly payment but significantly increases total interest over the life of the loan.
What happens if I miss an EMI payment?
Missed EMIs typically result in a late payment fee, an increase in the outstanding principal balance (due to accrued interest), and a negative impact on your credit score. Some lenders also charge a penal rate on the overdue amount.
Can I reduce my EMI by making a part-prepayment?
Yes. Making a lump-sum prepayment reduces the outstanding principal, which lowers either the remaining tenure or the EMI amount depending on the lender's terms. Most lenders allow part-prepayments, though some charge a prepayment penalty.

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