EMI Calculator

EMI is calculated on a reducing balance — each month's payment first covers that month's interest, and the rest reduces the principal. The formula is:

EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

• P — loan principal (amount borrowed)
• r — monthly interest rate (annual rate ÷ 12 ÷ 100)
• n — number of monthly instalments (years × 12)

Total interest = (EMI × n) − P. Because interest is charged only on the outstanding balance, prepaying principal early in the tenure saves far more interest than prepaying later.

Borrow ₹25,00,000 at 9% per annum for 20 years (240 months):

• Monthly rate r = 9 ÷ 12 ÷ 100 = 0.0075
• EMI = 25,00,000 × 0.0075 × (1.0075)²⁴⁰ ÷ ((1.0075)²⁴⁰ − 1) = ₹22,493
• Total payment = 22,493 × 240 = ₹53,98,320
• Total interest = 53,98,320 − 25,00,000 = ₹28,98,320

Monthly EMI is what leaves your account each month — keep it under 40% of your monthly income as a rule of thumb. Total interest shows the true cost of borrowing: on long tenures it can exceed the principal itself. Total payment is principal plus interest — the full amount you will have paid the lender.

Use these numbers to compare loan offers: a slightly lower rate over the same tenure always wins, and shortening the tenure (if you can afford the higher EMI) cuts interest dramatically.