How EMI is calculated
EMI stands for Equated Monthly Instalment — a fixed payment you make to a lender each month until the loan is repaid. It is calculated with the formula EMI = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1), where P is the principal, r is the monthly interest rate (annual rate divided by 12 and by 100), and n is the number of monthly instalments.
Why your total interest matters
A longer tenure lowers your monthly EMI but increases the total interest you pay over the life of the loan. Use this calculator to compare tenures and rates before committing, so you can balance an affordable monthly payment against the overall cost.
Tips to reduce your EMI burden
Make a larger down payment to reduce the principal, negotiate a lower interest rate, or make part-prepayments when possible. Even a small rate reduction can save a significant amount over a 15–20 year loan.
Frequently asked questions
What is EMI?
EMI (Equated Monthly Instalment) is the fixed amount you pay your lender every month, covering both principal and interest, until the loan is fully repaid.
How is loan EMI calculated?
EMI = P × r × (1+r)^n / ((1+r)^n − 1), where P is principal, r is the monthly interest rate and n is the number of months.
Does a longer tenure reduce EMI?
Yes, a longer tenure lowers the monthly EMI but increases the total interest paid over the loan.
Can I use this for home, car and personal loans?
Yes. The EMI formula is the same for any reducing-balance loan — just enter the relevant amount, rate and tenure.