How to use the EMI calculator
- Loan amount — the principal sanctioned by the bank or NBFC, in rupees (₹10,00,000 is 10 lakh; ₹1,00,00,000 is 1 crore).
- Interest rate — the annual rate on a reducing-balance basis, as quoted in the sanction letter.
- Tenure — the repayment period in years; half-years are allowed.
The result shows the EMI, the total interest over the tenure and a schedule of how much principal and interest you pay each year. The bar shows what share of everything you repay is interest.
What an EMI is
An Equated Monthly Instalment is a fixed payment made on the same date every month until the loan is cleared. Each EMI contains two parts: interest on the outstanding balance for that month, and principal that reduces the balance. Because the balance is largest at the start, early EMIs are mostly interest; as the balance shrinks, more of each instalment goes toward principal. The amount stays the same, only the split changes.
The EMI formula
EMI = P × i × (1 + i)N ÷ ((1 + i)N − 1)
where P is the loan amount, i is the monthly interest rate (annual rate ÷ 12 ÷ 100) and N is the number of monthly instalments (years × 12). At 0% interest the EMI is simply P ÷ N.
Worked example: a home loan of ₹10,00,000 at 8.5% for 20 years. i = 8.5 ÷ 1,200 = 0.007083 and N = 240, so the EMI is ₹8,678. Over 240 months you repay ₹20,82,776, which means ₹10,82,776 of interest — more than the amount borrowed. That is normal for a 20-year loan and the reason tenure matters so much.
How tenure and rate change the EMI
For the same ₹10 lakh at 8.5%:
| Tenure | EMI | Total interest |
|---|---|---|
| 10 years | ₹12,399 | ₹4,87,828 |
| 15 years | ₹9,847 | ₹7,72,531 |
| 20 years | ₹8,678 | ₹10,82,776 |
| 25 years | ₹8,052 | ₹14,15,681 |
| 30 years | ₹7,689 | ₹17,68,089 |
A longer tenure lowers the monthly outgo but raises the total interest steeply. The rate works the other way for a fixed 20-year tenure:
| Rate | EMI | Total interest |
|---|---|---|
| 7.5% | ₹8,056 | ₹9,33,424 |
| 8.5% | ₹8,678 | ₹10,82,776 |
| 9.5% | ₹9,321 | ₹12,37,115 |
| 10.5% | ₹9,984 | ₹13,96,112 |
Each percentage point on a 20-year loan changes the EMI by roughly 6–8%, so it is worth negotiating, comparing lenders and checking whether a better credit score qualifies you for a lower rate.
Reducing-balance vs flat rate
This calculator uses the reducing-balance method, which is how banks compute home, car and most personal loan EMIs: interest is charged only on what you still owe. Some lenders and dealers advertise a flat rate, where interest is charged on the full original amount for the whole tenure. A flat rate looks cheap but costs much more — a 10% flat rate over five years equals roughly a 17% reducing-balance rate. Always compare offers on the reducing-balance rate.
Typical tenures
- Home loans run up to 30 years, often capped by the borrower’s retirement age.
- Car loans are usually 3 to 7 years, with the vehicle as security.
- Personal loans are unsecured and typically 1 to 5 years, at higher rates.
Ways to pay less interest
- Prepay when you can. A part-prepayment goes entirely to principal, so every later EMI carries less interest. Floating-rate home loans to individuals cannot carry prepayment penalties under RBI rules; check the terms on fixed-rate and personal loans.
- Keep the EMI, cut the tenure. After a prepayment or a rate cut, ask the lender to shorten the tenure rather than reduce the EMI — the saving is far larger.
- Pay one extra EMI a year from a bonus; on a 20-year loan this removes years from the schedule.
Figures here are estimates from the inputs you enter; your lender’s sanction letter and amortization schedule are the final word, and a financial advisor can help you weigh prepaying against investing. To model an extra monthly payment, see the amortization calculator; for a dollar-based loan with fees, use the loan calculator.
Frequently asked questions
What is the EMI on a ₹10 lakh loan for 20 years?
At 8.5% a year the EMI is about ₹8,678 a month, with total interest of roughly ₹10,82,776. At 9.5% it rises to about ₹9,321.
Does the EMI change during the loan?
On a fixed-rate loan it stays the same. On a floating-rate loan the lender usually keeps the EMI constant and changes the tenure when the rate moves, though you can ask for the EMI to be revised instead.
Why is most of my early EMI interest?
Interest is charged on the outstanding balance, which is highest at the start. As the principal reduces, the interest part falls and the principal part grows, which the year-by-year schedule shows clearly.
Is a part-prepayment worth it?
Usually yes on a long loan: the prepaid amount stops earning interest for the lender immediately. Ask the bank to reduce the tenure instead of the EMI to get the largest saving, and confirm there is no prepayment charge.
How is EMI different from a flat-rate instalment?
An EMI charges interest only on what you still owe (reducing balance). A flat-rate instalment charges interest on the full original amount every month, which roughly doubles the effective rate. Compare offers on the reducing-balance rate.
Last updated: October 9, 2026