Free Tool · Loan EMI

EMI means Equated Monthly Instalment — the fixed amount you pay the lender every month until the loan is fully repaid. It covers both interest and a part of the principal.

EMI = P × r × (1+r)^n ÷ ((1+r)^n − 1), where P is the principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of months. This is the standard reducing-balance method used by all banks.

In a reducing-balance loan, interest is charged on the outstanding balance — which is highest at the start. So early EMIs are interest-heavy and later EMIs are principal-heavy, even though the EMI amount stays the same.

Yes — a longer tenure lowers the monthly EMI, but you pay significantly more total interest over the life of the loan. A shorter tenure means a higher EMI but much lower total interest.

Prepaying reduces your outstanding principal, which cuts the interest charged on all future EMIs. Prepaying early in the loan saves the most because the balance (and therefore interest) is highest then.

For fixed-rate loans, yes. For floating-rate loans, the EMI (or tenure) can change when the lender revises rates in line with the RBI repo rate or their benchmark.

A flat rate charges interest on the full original principal for the whole tenure, so the effective cost is far higher. A reducing-balance rate charges interest only on the outstanding balance — this calculator uses reducing balance.

No. It calculates pure EMI, interest, and total payable on the principal. Processing fees, insurance, and GST are charged separately by the lender and are not part of the EMI.