EMI Calculator — Free Loan Repayment Tool
An EMI (Equated Monthly Installment) is the fixed monthly payment you make to repay a loan. Enter your principal, annual interest rate, and tenure to instantly calculate your monthly EMI, total interest, and total repayment amount.
What is EMI?
EMI (Equated Monthly Installment) is the fixed amount a borrower pays to a lender every month to repay a loan. Each payment covers a portion of the principal (the amount borrowed) and a portion of the interest (the cost of borrowing). Indian banks calculate EMIs using the reducing-balance method — interest is computed on the outstanding principal each month, so the interest component decreases and the principal component increases over time.
The EMI Formula — Explained
EMI = [P × R × (1 + R)^N] / [(1 + R)^N − 1]
- P = Principal loan amount (₹)
- R = Monthly interest rate = Annual Rate / 12 / 100
- N = Loan tenure in months = Years × 12
Example: ₹5,00,000 loan at 8.5% p.a. for 5 years → R = 8.5/12/100 = 0.007083, N = 60 → EMI ≈ ₹10,249
How Loan Tenure Affects Your EMI
| Tenure | Monthly EMI | Total Interest | Total Payment |
|---|---|---|---|
| 3 Years | ₹15,783 | ₹68,182 | ₹5,68,182 |
| 5 Years | ₹10,249 | ₹1,14,920 | ₹6,14,920 |
| 10 Years | ₹6,224 | ₹2,46,884 | ₹7,46,884 |
| 20 Years | ₹4,386 | ₹5,52,567 | ₹10,52,567 |
*For ₹5,00,000 loan at 8.5% p.a. Shorter tenures save significant interest.
Accuracy & Methodology
This calculator uses the standard reducing-balance EMI formula used by all RBI-regulated banks in India. Results are rounded to the nearest rupee. Actual EMI from your bank may differ slightly due to loan processing date, rounding conventions, or fees. This tool is for planning purposes only — always verify with your lender's official schedule before signing any loan agreement.
Frequently Asked Questions
What is the EMI formula used by banks?
All Indian banks use the reducing-balance formula: EMI = [P × R × (1+R)^N] / [(1+R)^N − 1]. P = Principal, R = monthly rate (annual rate / 12 / 100), N = months. This calculator uses the same formula.
How can I reduce my EMI?
Three ways: (1) Make a larger down payment to reduce principal. (2) Negotiate a lower interest rate (check with multiple lenders). (3) Extend the loan tenure — but be aware this increases total interest paid.
Does prepayment reduce EMI or tenure?
Most banks give you the choice. Reducing tenure is more cost-effective — you pay less total interest. Reducing EMI gives you more monthly cash flow. Prepayment charges may apply on fixed-rate loans.
What is a good EMI-to-income ratio?
Keep total EMI obligations below 40–50% of your net monthly income. Most banks use a 40–55% FOIR (Fixed Obligation to Income Ratio) as the upper limit for loan eligibility.