Use this EMI calculator to work out the equal monthly instalment (EMI) on a home loan, car loan, personal loan or business loan. Enter the loan amount, interest rate and tenure to see your EMI, the total interest you will pay and a full repayment schedule. You can also compare a flat rate with a reducing-balance rate and test how an extra monthly payment shortens your loan.
| Year | Principal paid | Interest paid | Total paid | Balance left |
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Estimates only. Lenders use their own methods, rates, fees and rounding. Results update as you type; nothing you enter leaves your browser.
How to use the EMI calculator
- Loan amount: the principal you are borrowing, before any processing fee.
- Interest rate: the yearly rate quoted by your lender.
- Rate type: choose reducing balance if interest is charged only on the amount still owed (most bank loans). Choose flat rate if the lender charges interest on the original amount for the whole term, which is common with some car, consumer and microfinance loans.
- Tenure: the repayment period, in years or months.
- Extra payment each month: optional. Add any amount you plan to pay on top of the EMI to see how much sooner the loan closes and how much interest you save.
What is an EMI?
An EMI, or equated monthly instalment, is the fixed amount you pay your lender every month until the loan is repaid. Each EMI has two parts: interest on the balance still outstanding, and a repayment of principal. In the early months, a larger share of each EMI goes to interest. On a long loan, such as a 20-year home loan, interest can make up most of the payment for the first several years. As the balance falls, the interest part shrinks and more of each payment reduces the loan. The schedule below the calculator shows this split month by month or year by year.
The EMI formula
For a reducing-balance loan, the EMI is calculated as:
EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1)
- P is the loan amount (principal).
- r is the monthly interest rate, which is the annual rate divided by 12 and by 100. A 10% yearly rate gives r = 0.00833.
- n is the number of monthly instalments. A 5-year loan has n = 60.
For a flat-rate loan the maths is simpler: total interest = P × annual rate × years, and the EMI = (P + total interest) ÷ n.
Worked example
Suppose you borrow 1,000,000 for 5 years at 10% a year on a reducing balance. The EMI comes to about 21,247 a month. Over 60 months you repay about 1,274,823, so the total interest is about 274,823.
If you pay an extra 5,000 a month on top of the EMI, the loan closes in about 47 months instead of 60, and total interest falls to about 208,133. That saves roughly 66,690 in interest.
Flat rate vs reducing balance: why the headline rate can mislead
A flat rate looks cheaper than it is, and I have seen plenty of borrowers pick a 10% flat offer over a 14% reducing-balance offer, only to find the flat one was the more expensive loan. With a flat rate, interest is charged on the full original loan for the whole term, even though you repay part of it every month. The same 1,000,000 loan at a 10% flat rate for 5 years costs 500,000 in interest and an EMI of 25,000. That is equivalent to about 17.3% on a reducing balance, far more than the 10% headline suggests.
When you compare offers, put them on the same basis first. Select flat rate in the calculator and it will show the equivalent reducing rate for you.
How to lower your EMI or your total interest
- Longer tenure: lowers the EMI but increases the total interest you pay.
- Shorter tenure: raises the EMI but cuts total interest sharply.
- Larger down payment: a smaller loan means a smaller EMI and less interest.
- Prepayments: extra payments go straight to principal, so every later EMI carries less interest. Check whether your lender charges a prepayment fee first.
- Negotiate the rate: even 1% off the rate makes a large difference on a long loan.
What lenders check besides the EMI
Lenders do not only look at whether the EMI fits your budget. For individuals, many banks cap total monthly debt payments at a share of net income, often somewhere around 40% to 50%, though the limit varies by lender and country. For a business, the bank tests whether operating cash flow covers all debt payments with room to spare, using the debt service coverage ratio (DSCR). To see how large a loan your business can carry, use the borrowing capacity calculator. If your loan has an upfront processing fee, the business loan calculator shows the true yearly cost including that fee.
Frequently asked questions
Does my EMI change if interest rates change?
On a fixed-rate loan, no. On a floating-rate loan, the lender may either change your EMI or keep the EMI the same and change the tenure when the benchmark rate moves. Ask your lender which method they use.
Is a lower EMI always better?
Not necessarily. A lower EMI usually comes from a longer tenure, which means you pay interest for longer. Choose an EMI you can comfortably afford, then pick the shortest tenure that fits it.
Why does so much of my early EMI go to interest?
Interest is charged on the outstanding balance, which is highest at the start. As you repay principal, the interest part of each EMI falls and the principal part rises.
Does the calculator include processing fees or insurance?
No. It shows the EMI on the loan amount you enter. Fees, insurance and taxes charged by the lender add to your total cost. Compare two offers side by side with the loan comparison calculator, and before signing, read how to read a bank term sheet.
These figures are estimates for planning only and are not an offer or financial advice. Your lender’s schedule may differ slightly because of rounding, day-count methods and fees.