EMI Calculator

How to use this calculator

Fill in the sanctioned loan amount, the annual interest rate from your sanction letter, and the tenure. The calculator returns your EMI, the interest over the full tenure, and a month-by-month schedule you can export.

• Loan amount: the sanctioned principal. For a home loan this is the property cost minus your down payment (banks commonly fund about 75–90% of the property value, subject to regulatory loan-to-value caps that vary with loan size; your sanction letter states the funded amount).
• Interest rate: the annual reducing-balance rate. If a dealer or NBFC quotes a "flat rate", do not enter it here; read the note below on why the two are not comparable.
• Tenure: tenures vary by lender — home loans in India often run 15–30 years, car loans 3–7 years, and personal loans 1–5 years — so use the tenure from your sanction letter. Toggle between years and months.
• One-time prepayment (optional): enter a lump sum (a bonus, maturing FD, or annual incentive) and the month you plan to pay it, and the results show the interest saved and how much earlier the loan closes.

How your EMI splits between principal and interest

EMI stands for equated monthly installment, the fixed modeled amount that closes the balance at the end of the tenure. This calculator uses a monthly reducing balance: each period's interest is the outstanding principal times one-twelfth of the annual rate, and the rest of the EMI reduces principal. On a ₹25,00,000 loan at 8.5% for 20 years, the modeled EMI is ₹21,695.58; in the first month, ₹17,708 of it is interest and only ₹3,987 touches the principal. Two decades later the proportions have fully reversed. Actual lender schedules can differ because of daily accrual, reset dates, fees and rounding.

This structure explains a fact that surprises many first-time borrowers: over a 20-year tenure at 8.5%, the total interest of ₹27,06,939 exceeds the ₹25,00,000 you borrowed. Principal makes up just 48% of everything you pay. Long tenures keep the EMI affordable relative to income, but they hand the bank interest for 240 separate months.

Beware the flat rate. Some NBFCs, dealer finance desks and gold-loan shops quote a "flat rate", where interest is computed on the original principal for the whole tenure, ignoring everything you have already repaid. A flat 8% on a ₹8,00,000 five-year car loan means an installment of ₹18,667 — the same installment a reducing-balance loan would carry at roughly 14.13%. As a rule of thumb, a flat rate is equivalent to a reducing-balance rate about 1.7–1.8 times higher, so always ask which method a quote uses before comparing offers.

Prepayment can materially reduce interest, but charges and treatment depend on the borrower, lender, rate type, loan purpose, contract date and applicable RBI direction. The linked RBI source below describes the relevant regulatory scope; your sanction letter controls your loan. This calculator assumes the prepayment is applied directly to principal, the EMI stays unchanged and the tenure shortens. Confirm that treatment before relying on the estimate.

Formula and methodology

The EMI on a reducing-balance loan is:

Month by month, the schedule applies: interest = outstanding balance × r; principal repaid = EMI − interest; new balance = old balance − principal repaid. A one-time prepayment is subtracted from the balance in the month you choose, after which the same EMI clears the smaller balance in fewer months. At a 0% rate the EMI is simply P ÷ n. This is a common monthly reducing-balance model, not a representation of every Indian loan; a flat-rate or daily-accrual quote follows different arithmetic and cannot be entered here directly.

Worked example

What changes the result

• Tenure. The same ₹25,00,000 at 8.5% costs ₹19,31,328 in interest over 15 years (EMI ₹24,618) versus ₹27,06,939 over 20 years (EMI ₹21,696). The ₹2,923 lower EMI buys ₹7,75,611 of extra interest.
• Rate. Half a percentage point matters at these tenures: at 9% instead of 8.5%, the EMI rises only ₹798 but lifetime interest climbs by about ₹1,91,416.
• Prepayment timing. A lump sum in year 2 removes far more interest than the same sum in year 12, because it stops interest accruing on that slice of principal for all the remaining months.
• Quoting method. Reducing-balance and flat-rate quotes differ hugely at the same headline number — a flat 8% behaves like roughly 14% reducing. Compare only like with like.

Assumptions and limitations

• Assumes a fixed rate for the whole tenure. Many Indian home loans are floating-rate, linked to an external benchmark such as the repo rate, so your EMI or tenure may be reset when the benchmark moves.
• Processing fees, GST on charges, and loan insurance premiums are not included; they raise the effective cost above the quoted rate.
• The prepayment model keeps the EMI constant and shortens the tenure; if you instead ask the bank to reduce the EMI and keep the tenure, the interest saving is smaller.
• Pre-EMI interest on under-construction property (paid before full disbursal) is outside the scope of this schedule.
• Figures are for planning. Your bank's sanction letter and repayment schedule are the binding documents.

Sources and references

• Reserve Bank of India: circular on foreclosure charges / prepayment penalties — the regulatory basis for the note on prepaying floating-rate loans to individuals.
• Reserve Bank of India — regulator of the reducing-balance lending conventions this calculator models.