How to use the EMI calculator
- Pick a loan type or enter the loan amount, interest rate and tenure.
- Read your monthly EMI, total interest and total amount payable.
- Add one-time or yearly prepayments to see the interest you save.
- Add a rate rise or cut to see how your EMI or tenure would change.
- Add each bank's offer to the comparison table to find the cheapest.
EMI formula
Banks in India calculate EMI on a reducing balance using:
EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1)
- P is the loan amount (principal).
- r is the monthly interest rate: the annual rate ÷ 12 ÷ 100.
- n is the tenure in months.
EMI calculation example
Take a loan of ₹10,00,000 at 9.5% a year for 5 years.
- r = 9.5 ÷ 12 ÷ 100 = 0.007917
- n = 5 × 12 = 60 months
- EMI = ₹21,002 a month
- Total interest = ₹2,60,112, so you repay ₹12,60,112 in all.
How tenure changes EMI and interest
A longer tenure lowers the EMI but sharply raises the total interest. For a ₹50 lakh home loan at 8.5%:
| Tenure | EMI | Total interest | Total payable |
|---|---|---|---|
| 10 years | ₹61,993 | ₹24,39,141 | ₹74,39,141 |
| 15 years | ₹49,237 | ₹38,62,656 | ₹88,62,656 |
| 20 years | ₹43,391 | ₹54,13,879 | ₹1,04,13,879 |
| 25 years | ₹40,261 | ₹70,78,406 | ₹1,20,78,406 |
| 30 years | ₹38,446 | ₹88,40,443 | ₹1,38,40,443 |
EMI by loan amount
Ways to pay less interest
- Prepay early. A prepayment in the first few years saves far more than the same amount later.
- Raise your EMI with your salary. Even a 5% yearly step-up can cut years off a home loan.
- Choose the shortest tenure you can afford. Check the EMI against your income first.
- Compare the full cost of offers, not just the rate. A lower rate with a higher fee can cost more.
- Use the tax benefits on home loans if you are in the old regime; see the income tax calculator.
Frequently asked questions
What is an EMI?
An equated monthly instalment (EMI) is the fixed amount you pay your lender every month until the loan is repaid. Each EMI covers that month's interest on the outstanding balance, and the rest reduces the principal.
How is EMI calculated?
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly instalments. This is the reducing-balance method used by banks in India.
Why is most of my early EMI going to interest?
Interest is charged on the outstanding balance, which is highest at the start. As you repay principal the balance falls, so each month a little less goes to interest and a little more to principal.
Is it better to reduce EMI or tenure after a prepayment?
Reducing the tenure saves more interest, because the same EMI keeps paying down a smaller balance. Reducing the EMI frees up monthly cash flow instead. Use the prepayment planner above to compare both for your loan.
What happens to my EMI if the interest rate changes?
On a floating-rate loan, a rate change usually alters either your EMI or your remaining tenure. Lenders often extend the tenure first. RBI rules require lenders to tell you about the reset and to offer you the choice of a higher EMI, a longer tenure or a mix of both.
Are there charges for prepaying a loan?
Banks and NBFCs cannot charge foreclosure or prepayment penalties on floating-rate term loans taken by individuals for non-business purposes. Fixed-rate loans and business loans may carry charges, so check your loan agreement.
How much loan can I get on my salary?
Most lenders keep all your EMIs within about 40–50% of your take-home income. Switch the calculator to EMI budget to see the largest loan a given EMI can support.
How accurate is this EMI calculator?
It uses the standard reducing-balance formula. Your lender's figure can differ slightly because of processing fees, broken-period interest in the first month, the day-count convention or rounding.