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Loan EMI Calculator
Work out your monthly loan payment (EMI), total interest and a year-by-year amortization breakdown.
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How it's calculated
EMI stands for Equated Monthly Installment - a fixed payment made every month that covers both interest and a portion of the principal, so the loan is fully paid off by the end of its term.
The formula is EMI = P × r × (1 + r)^n ÷ [(1 + r)^n − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of monthly installments.
Early in the loan, most of each EMI goes toward interest; later payments shift increasingly toward principal. This calculator shows that shift year by year so you can see how the balance actually reduces over time, not just the fixed monthly figure.
Standard reducing-balance amortization formula
Worked examples
Example 1: short-term personal loan
Loan of 20,000 at 12% annual interest over 3 years (36 months). Monthly EMI ≈ 664.29. Total payable ≈ 23,914, so total interest ≈ 3,914.
Example 2: long-term home loan
Loan of 300,000 at 7% annual interest over 20 years (240 months). Monthly EMI ≈ 2,325.90. Total payable ≈ 558,215, so total interest ≈ 258,215 - more than the original loan amount, which is normal for long-term loans at this rate.
Example 3: car loan
Loan of 40,000 at 5.5% annual interest over 5 years (60 months). Monthly EMI ≈ 764.05. Total payable ≈ 45,843, so total interest ≈ 5,843.
Rules at a glance
| Factor | Effect on your EMI |
|---|---|
| Higher loan amount | EMI increases proportionally. |
| Higher interest rate | EMI increases, and the share of interest in early payments grows. |
| Longer tenure | EMI decreases, but total interest paid over the life of the loan increases. |
| Shorter tenure | EMI increases, but total interest paid decreases. |
| Fixed vs. reducing-balance interest | This calculator uses reducing-balance interest, the standard method for most personal, auto, business and home loans. |
Frequently asked questions
What does EMI mean?
Equated Monthly Installment - the fixed amount you pay every month toward a loan, combining both principal and interest, until the loan is fully repaid.
Why does most of my early EMI go to interest?
Interest is calculated on the remaining loan balance each month. Early on, the balance is highest, so the interest portion is largest; as the balance shrinks, more of each EMI goes toward principal.
Does a longer loan tenure save money?
No - a longer tenure lowers your monthly EMI but increases the total interest you pay over the life of the loan, often substantially for home loans.
Is this calculator accurate for any currency?
Yes. The formula is currency-independent - enter your loan amount and rate in whichever currency your lender uses, and the result will be in the same currency.
Does this include processing fees or insurance?
No. This calculates the core principal-and-interest EMI only. Add any processing fees, insurance or other charges your lender quotes separately.
What is the difference between flat-rate and reducing-balance interest?
Reducing-balance interest (used here) charges interest only on the outstanding balance, so it falls as you repay. Flat-rate interest charges on the original amount throughout, which usually works out more expensive for the same quoted rate.
Can I use this for a business loan?
Yes, the same amortization formula applies to personal, auto, business and most fixed-rate home loans.
Sources: Standard amortization / reducing-balance loan formula (widely used in consumer and banking finance)
This calculator gives an estimate based on the standard EMI formula. It does not include lender fees, insurance or taxes, and is not financial advice. Confirm the exact figures with your lender before making a decision.