Calculators
EMI Calculator
Last updated 17 June 2026The interactive EMI calculator runs on this page. Open the calculator ↑
Key Takeaways
- EMI = principal + interest, fixed every month. Early instalments are mostly interest; later ones are mostly principal.
- A ₹10,00,000 loan at 9.5% for 15 years = ₹10,442/month, with roughly ₹8.80 lakh paid as interest over the full term.
- A higher interest rate raises your EMI — roughly ₹600 more per month for every 1% on a ₹10 lakh, 15-year loan.
- A longer tenure lowers the EMI but sharply increases total interest — stretching the same loan from 15 to 25 years cuts the EMI but nearly doubles the interest.
- Prepaying early saves the most, because that is when your outstanding balance — and therefore your interest — is highest.
EMI Formula
Indian lenders calculate EMI on a reducing-balance basis using this standard formula:
EMI = P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1]
Where:
| Symbol | Meaning | Example |
|---|---|---|
| P | Principal (loan amount) | ₹10,00,000 |
| r | Monthly interest rate = annual rate ÷ 12 ÷ 100 | 9.5% → 0.095 ÷ 12 = 0.0079167 |
| n | Number of monthly instalments = years × 12 | 15 years → 180 |
"Reducing-balance" means interest each month is charged only on the remaining balance, not the original loan amount. This is why your interest portion falls as the loan progresses. Watch out for "flat rate" loans, which are calculated differently and cost much more — see the FAQ on flat vs reducing rate.
Step-by-Step Worked Example
Let's calculate the EMI on a ₹10,00,000 loan at 9.5% per year for 15 years.
Step 1 — Find the monthly rate (r). 9.5 ÷ 12 ÷ 100 = 0.0079167
Step 2 — Find the number of instalments (n). 15 × 12 = 180 months
Step 3 — Calculate (1 + r)ⁿ. (1.0079167)¹⁸⁰ = 4.1346
Step 4 — Apply the formula. EMI = 10,00,000 × 0.0079167 × 4.1346 ÷ (4.1346 − 1) EMI = 32,732 ÷ 3.1346 = ₹10,442
Step 5 — Find total cost.
- Total payable = ₹10,442 × 180 = ₹18,79,560
- Total interest = ₹18,79,560 − ₹10,00,000 = ₹8,79,560
So on a ₹10 lakh loan you repay nearly ₹8.80 lakh in interest over 15 years — almost as much as the loan itself. The calculator above does all of this instantly; the maths is shown here so you can verify it.
How Interest Rate Impacts EMI
The interest rate has a direct effect on both your monthly EMI and the total interest you pay. The table below keeps the loan at ₹10,00,000 over 15 years and varies only the rate.
| Interest rate | Monthly EMI | Total interest | Total payable |
|---|---|---|---|
| 8.5% | ₹9,848 | ₹7,72,640 | ₹17,72,640 |
| 9.5% | ₹10,442 | ₹8,79,560 | ₹18,79,560 |
| 10.5% | ₹11,055 | ₹9,89,900 | ₹19,89,900 |
| 11.5% | ₹11,682 | ₹11,02,760 | ₹21,02,760 |
Each 1% increase adds roughly ₹600 to the monthly EMI and over ₹1 lakh to the total interest on this loan. This is why negotiating even a small rate reduction — or improving your credit score to qualify for a better rate — can save a meaningful amount over the life of a loan.
How Loan Tenure Impacts EMI
Tenure works in the opposite direction to most people's intuition: a longer tenure makes the monthly EMI smaller but the total interest much larger, because you are borrowing the money for longer. The table keeps the loan at ₹10,00,000 at 9.5% and varies only the tenure.
| Tenure | Monthly EMI | Total interest | Total payable |
|---|---|---|---|
| 10 years | ₹12,940 | ₹5,52,800 | ₹15,52,800 |
| 15 years | ₹10,442 | ₹8,79,560 | ₹18,79,560 |
| 20 years | ₹9,322 | ₹12,37,280 | ₹22,37,280 |
| 25 years | ₹8,737 | ₹16,21,100 | ₹26,21,100 |
Stretching the loan from 10 to 25 years drops the EMI by about ₹4,200 a month — but triples the interest, from roughly ₹5.5 lakh to over ₹16 lakh. A sensible approach is to choose the shortest tenure whose EMI you can comfortably afford, rather than the longest tenure on offer.
Prepayment Impact
Prepayment means paying more than your scheduled EMI — either as a lump sum or by increasing the EMI — to clear the loan faster. Because interest is charged on the outstanding balance, prepaying early in the loan saves far more than prepaying late, when most of the principal is already paid off.
You usually have two choices when you prepay a lump sum:
- Keep the EMI the same and reduce the tenure — this saves the most interest and is the better option for most borrowers.
- Keep the tenure the same and reduce the EMI — this eases monthly cash flow but saves less interest.
For example, on the ₹10 lakh, 9.5%, 15-year loan above, a one-time prepayment of ₹1,00,000 at the end of year 2 (while keeping the EMI unchanged) can shorten the loan by roughly two years and save approximately ₹2.5–3 lakh in interest — a substantial return for a single payment.
Important for Indian borrowers: the RBI does not permit banks and NBFCs to charge foreclosure or prepayment penalties on floating-rate term loans taken by individuals for non-business purposes. Fixed-rate loans may still attract a charge, so confirm your loan type and the exact terms with your lender before prepaying.
Amortisation Schedule Explained
An amortisation schedule is a month-by-month breakdown of how each EMI is split between interest and principal, and how your outstanding balance falls over time. Even though the EMI stays fixed, the split changes every month: early on, most of the EMI is interest; later, most of it is principal.
The table below shows milestone months for the ₹10,00,000, 9.5%, 15-year loan (EMI ₹10,442):
| Month | Interest portion | Principal portion | Outstanding balance |
|---|---|---|---|
| 1 | ₹7,917 | ₹2,525 | ₹9,97,475 |
| 60 (end of year 5) | ₹6,420 | ₹4,022 | ₹8,06,953 |
| 120 (end of year 10) | ₹3,988 | ₹6,454 | ₹4,97,296 |
| 180 (final) | ₹82 | ₹10,360 | ₹0 |
Notice that after five years of payments you have only repaid about ₹1.93 lakh of the ₹10 lakh principal — the rest of what you paid went to interest. This front-loading of interest is exactly why early prepayment is so powerful.
How to Use This Calculator
- Enter the loan amount you plan to borrow (or drag the slider).
- Enter the annual interest rate quoted by your lender, in per cent per year.
- Set the tenure in years.
- Read your monthly EMI instantly, along with the total interest and total amount payable.
- Use the principal-vs-interest breakdown to see how much of your repayment is interest.
- Adjust the inputs to compare scenarios — for example, a shorter tenure or a slightly lower rate — before you sign a loan agreement.
The calculator uses the standard reducing-balance EMI formula and updates as you type. It works for home loans, personal loans, car loans, education loans and most term loans in India.
Expert Verdict
"Most borrowers focus only on the EMI they can afford each month, and let the lender set the tenure. That is the wrong lens. The EMI is just cash flow; the number that actually matters is the total interest. Run the same loan at two or three tenures in this calculator and you will usually find that a slightly higher EMI over a shorter term saves you lakhs. And if you ever come into extra money, prepay early — the calculator's amortisation breakdown shows you exactly why the first few years are where the interest is hiding."
— The Tips4Banking Editorial Team · checked against primary sources before publishing
Frequently asked questions
How is EMI calculated in India?
EMI is calculated on a reducing-balance basis using the formula EMI = P × r × (1+r)ⁿ ÷ [(1+r)ⁿ − 1], where P is the loan amount, r is the monthly interest rate, and n is the number of months. Interest each month is charged only on the outstanding balance.
What is the EMI on a ₹10 lakh loan?
At 9.5% per year over 15 years, the EMI on a ₹10,00,000 loan is about ₹10,442 per month, with total interest of roughly ₹8.80 lakh. The exact figure depends on your rate and tenure — use the calculator above.
What is the difference between flat and reducing-balance interest?
With reducing-balance interest, you are charged only on the remaining balance, so the interest portion falls over time. With a flat rate, interest is charged on the full original amount for the whole tenure, which makes a "lower" flat rate far more expensive — a 10% flat rate is roughly equivalent to an 18–19% reducing rate. Always compare loans on the reducing-balance (or APR) basis.
Does a longer tenure reduce my EMI?
Yes, a longer tenure lowers the monthly EMI because the principal is spread over more months. However, it significantly increases the total interest you pay, because you hold the loan for longer.
How can I reduce my EMI?
You can reduce your EMI by borrowing less, negotiating a lower interest rate, choosing a longer tenure (at the cost of more total interest), or refinancing an existing loan to a cheaper one. Improving your credit score before applying often unlocks a better rate.
Does prepaying a loan reduce the EMI or the tenure?
You usually choose. Keeping the EMI the same and reducing the tenure saves the most interest; keeping the tenure and reducing the EMI eases monthly cash flow but saves less. Prepaying earlier in the loan always saves more than prepaying later.
Are there charges for prepaying a loan in India?
For floating-rate term loans taken by individuals for non-business purposes, the RBI does not allow banks and NBFCs to levy foreclosure or prepayment penalties. Fixed-rate loans may carry a charge, so check your loan agreement.
Is this EMI calculator accurate for home, personal and car loans?
Yes. All these are reducing-balance term loans, so the same formula applies. The calculator gives an accurate estimate; your lender's final EMI may differ slightly due to processing fees, the exact interest-start date, or insurance added to the loan.
What is included in an EMI?
Each EMI is split into two parts: interest on the outstanding balance and repayment of principal. The proportion shifts over the loan — more interest early, more principal later — even though the total EMI stays fixed.
Why does my loan balance fall so slowly in the early years?
Because interest is front-loaded. In the first months, most of your EMI goes towards interest on a large outstanding balance, so only a small amount reduces the principal. As the balance falls, the interest portion shrinks and the principal portion grows.
Does a missed EMI affect my credit score?
Yes. Missed or late EMI payments are reported to credit bureaus and can lower your CIBIL score, making future loans costlier or harder to get. Setting up auto-debit helps avoid accidental misses.
Can the EMI on my loan change during the tenure?
On a fixed-rate loan, the EMI stays constant. On a floating-rate loan, the EMI (or the tenure) can change when the lender's benchmark rate changes — typically the tenure is adjusted first, with the EMI revised periodically.
Sources
- Reserve Bank of India — guidelines on foreclosure charges / pre-payment penalties on floating-rate term loans to individual borrowers. (rbi.org.in)
- Reserve Bank of India — Fair Practices Code and disclosure norms for banks and NBFCs on loan pricing and the Key Fact Statement. (rbi.org.in)
- Standard reducing-balance EMI formula (financial mathematics); all worked examples in this article calculated and verified by the Tips4Banking editorial team.
Figures in this article are illustrative and calculated using the standard EMI formula. Your actual EMI depends on your lender's terms, fees and interest-reset rules.