What is EMI?

EMI, or Equated Monthly Installment, is the fixed amount you pay every month to a bank or financial institution until your loan is fully repaid. Each EMI includes:

• Interest on the loan, and
• Principal repayment.

The total loan amount, including interest, is divided across the loan tenure (in months). During the initial months, a larger portion of the EMI goes toward interest, while over time, more goes toward repaying the principal. Although the EMI remains constant, the ratio of interest and principal changes as you progress through the loan.

EMI Formula

Where:

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

For example, if you borrow ₹10,00,000 from the bank at 10.5% annual interest for a period of 10 years (i.e., 120 months), then EMI = ₹10,00,000 * 0.00875 * (1 + 0.00875)¹²⁰ / ((1 + 0.00875)¹²⁰ – 1) = ₹13,493. i.e., you will have to pay ₹13,493 for 120 months to repay the entire loan amount. The total amount payable will be ₹13,493 * 120 = ₹16,19,220 that includes ₹6,19,220 as interest toward the loan.

Calculating EMI manually or using Excel can be time-consuming and prone to errors. Our Borrow Right EMI Calculator instantly provides accurate results, along with visual charts showing your payment schedule and the principal-interest breakdown.

How to Use the EMI Calculator

Our EMI Calculator is quick, intuitive, and easy to use, suitable for home loans, car loans, personal loans, education loans, or any other amortizing loan.

Steps to calculate EMI:

1. Enter the principal loan amount you want to borrow.
2. Enter the loan term (months or years).
3. Enter the interest rate (percentage).
4. Choose EMI in arrears or EMI in advance (car loans only).
5. Use the slider to adjust values or type them directly for precision. The EMI is recalculated instantly.

The calculator also provides:

• Pie chart: Shows total principal vs. total interest payable.
• Payment schedule table: Details monthly/yearly payments for the entire loan duration.
• Yearly interest vs. principal chart: Visualizes how each EMI reduces interest and increases principal over time.

Prepayments & Loan Affordability

Want to shorten your home loan tenure and reduce interest? Try our Home Loan EMI Calculator with Prepayments.

You can also calculate:

• How much loan you can afford.
• Actual loan interest rate versus advertised rate (with APR).

Floating Rate EMI Calculation

For loans with floating or variable interest rates, we recommend evaluating two scenarios:

1. Optimistic (deflationary) scenario:
   Assume interest rates drop by 1%–3%. Your EMI will reduce, or you may shorten the loan tenure. Useful for comparing with other investment options.
2. Pessimistic (inflationary) scenario:
   Assume interest rates rise by 1%–3%. Determine if your EMI remains affordable. Even a 2% hike can significantly increase monthly payments.

Tip: Always plan for both scenarios—hope for the best, but prepare for the worst. Loans are long-term financial commitments, and planning helps ensure you remain financially secure throughout the tenure.