What is an EMI?
An Equated Monthly Instalment (EMI) is the fixed amount you pay your bank every month until a loan is fully repaid. Each EMI has two parts: interest on the outstanding balance and a repayment of principal. In the early years most of your EMI is interest; towards the end, almost all of it reduces the principal. This EMI calculator shows your monthly payment, the total interest over the life of the loan and a year-by-year amortisation schedule.
How to use the EMI calculator
- Pick a preset (home, car or personal loan) or enter your own loan amount.
- Enter the interest rate offered by your bank and the tenure in years.
- Your EMI, total interest and total payment update instantly. Tap a bar in the chart or open the schedule to see how much principal and interest you pay each year.
EMI formula
EMI = P × r × (1 + r)n ÷ [(1 + r)n − 1]
- P = loan amount (principal)
- r = monthly interest rate = annual rate ÷ 12 ÷ 100
- n = tenure in months
Example
For a ₹30 lakh home loan at 8.5% for 20 years: r = 8.5 ÷ 1200 = 0.00708 and n = 240. The EMI comes to about ₹26,035. Over 20 years you pay about ₹62.5 lakh, which means roughly₹32.5 lakh is interest — more than the loan itself. Cutting the tenure to 15 years raises the EMI to about ₹29,540 but saves around ₹9.3 lakh in interest.
Ways to reduce your loan cost
- Make part-prepayments whenever you get a bonus — every rupee prepaid early saves years of interest.
- Increase your EMI by 5–10% each year as your income grows.
- Compare lenders and consider a balance transfer if another bank offers a much lower rate.
- Keep a good credit score (750+) to qualify for the best interest rates.
Home loan borrowers can also claim tax benefits on principal (Section 80C) and interest (Section 24(b)) under the old tax regime — compare both regimes with our income tax calculator.
Disclaimer: Results are estimates for educational purposes only and are not financial, investment or tax advice. Please verify with your bank, broker or a SEBI-registered adviser before acting. Read the full disclaimer.