How to use the loan EMI calculator
- 1Enter the Loan amount, the yearly Interest rate and the Tenure.
- 2Switch Tenure in between Years and Months if needed, and choose a Currency.
- 3Read the Monthly EMI, total interest and total of all payments, with the formula underneath.
- 4Scroll to Amortization schedule, view it By year or By month, and press CSV to download it.
Home loan: 10,00,000 at 8.5% for 20 years
Loan amount 1,000,000 · Interest rate 8.5% p.a. · Tenure 20 years
Monthly EMI 8,678.23 Total interest 1,082,775.76 Total of all payments 2,082,775.76
In month 1, 7,083.33 of the EMI is interest and only 1,594.90 repays principal. By the last month, interest is 61.04.
The EMI formula
An equated monthly instalment (EMI) is the fixed payment that repays a reducing-balance loan exactly over its tenure:
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
- P = principal (the amount borrowed)
- r = monthly interest rate = annual rate ÷ 12 ÷ 100 (8.5% → 0.0070833)
- n = number of monthly payments (20 years → 240)
Each month, interest is charged on the outstanding balance only, and the rest of the EMI reduces the balance. At 0% interest the formula reduces to P ÷ n.
Amortization schedule
The schedule lists every payment with its interest part, principal part and remaining balance:
- Interest this month = Balance × r
- Principal this month = EMI − Interest
- New balance = Balance − Principal
Early payments are mostly interest because the balance is at its largest. On the 10,00,000 example, the first year's payments total 1,04,138.79, of which 84,236.50 is interest and only 19,902.29 reduces the loan. The final payment is adjusted by a few paise so the balance ends at exactly zero.
How rate and tenure change the EMI
Same 10,00,000 loan, different terms:
| Rate | Tenure | EMI | Total interest |
|---|---|---|---|
| 8.5% | 15 years | 9,847.40 | 7,72,531.20 |
| 8.5% | 20 years | 8,678.23 | 10,82,775.76 |
| 8.5% | 25 years | 8,052.27 | 14,15,681.25 |
| 7.5% | 20 years | 8,055.93 | 9,33,423.66 |
| 9.5% | 20 years | 9,321.31 | 12,37,114.85 |
Stretching 20 years to 25 cuts the EMI by 626 a month but adds over 3.3 lakh of interest. One percentage point on the rate changes the 20-year total by roughly 1.5 lakh.
Prepayments
A part-prepayment goes straight to principal, so all later interest is charged on a smaller balance. Lenders then either keep the EMI and shorten the tenure, or keep the tenure and lower the EMI. Keeping the EMI saves more interest.
On the example loan, the balance after 5 years is 8,81,271.83. Prepaying 2,00,000 then and keeping the EMI at 8,678.23 clears the loan in about 115 more months instead of 180; keeping the tenure instead lowers the EMI to 6,708.75. In India, RBI rules stop banks and NBFCs charging prepayment penalties on floating-rate loans to individuals for non-business purposes; check your loan agreement for fixed-rate loans.
Fixed vs floating rates
With a fixed rate, the EMI and the schedule above hold for the agreed period. With a floating rate, the rate moves with a benchmark (in India, usually the repo-linked lending rate), and the lender changes either the EMI or the tenure when it resets. Indian lenders must tell you about a reset and let you choose between a higher EMI and a longer tenure, within limits.
To see the effect of a rate change, enter the outstanding balance, the new rate and the remaining months.
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