EMI Calculator
This EMI Calculator helps you estimate your monthly loan EMI (Equated Monthly Instalment), along with the total interest payable and the overall repayment amount for a loan.
By adjusting the loan amount, interest rate, and tenure, you can understand how different loan terms affect your monthly cash flow and how your outstanding balance reduces over time through an amortization schedule.
How the EMI Calculation Works
EMI is calculated using a standard loan amortization method, where the loan is repaid in fixed monthly instalments over a defined tenure. Each EMI consists of two components — interest charged on the outstanding loan balance and repayment of the principal.
In the initial months, a larger portion of the EMI goes towards interest. As the loan progresses, the interest component gradually reduces and the principal repayment increases, while the EMI amount itself remains constant.
The calculation assumes a fixed interest rate with monthly compounding. Taxes, processing fees, insurance, and prepayment charges are not included, and minor rounding differences may occur when compared to actual bank statements.
Inputs and Options Explained
The calculator allows you to control the key variables that determine your EMI and total repayment.
- Loan Amount (₹): The total principal amount borrowed from the lender.
- Annual Interest Rate (%): The yearly interest rate charged by the lender, assumed to be fixed for the entire tenure.
- Loan Tenure: The total duration of the loan, selectable in years or months.
Examples and Edge Cases
Small changes in interest rate or loan tenure can significantly affect the total cost of a loan, even if the change in monthly EMI appears modest.
Longer tenures generally reduce the monthly EMI but increase the total interest paid over time. On the other hand, shorter tenures lead to higher EMIs but a lower overall loan cost. Similarly, higher interest rates substantially increase the interest component of each EMI.
Switching between years and months does not change the underlying calculation logic, as the tenure is ultimately converted into total months internally.
Who Should Use This Tool
This tool is useful for anyone evaluating or managing an EMI-based loan, including individuals planning a home, car, or personal loan. It is also helpful for borrowers comparing loan offers from different lenders and for anyone trying to understand how loan repayment and interest behavior change over time.
Students and first-time borrowers can also use this calculator to build intuition around how EMI-based loans work in practice.
Related Concepts
EMI refers to the fixed monthly payment made towards loan repayment. The principal is the original loan amount borrowed, while interest represents the cost charged by the lender for borrowing that amount. Amortization describes how the loan balance gradually reduces over time as EMIs are paid.
While EMI-based loans help manage large expenses, long-term financial goals such as wealth creation are often planned using investment tools like Systematic Investment Plans (SIP) or lump sum investments.