Loan EMI Calculator
Updated · By the CalculatorDash editorial team · How we check our maths
Quick answer
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r the monthly interest rate and n the number of months. A ₹30 lakh home loan at 8.5% for 20 years has an EMI of about ₹26,035, and you pay roughly ₹32.5 lakh in interest over the term.
How this calculator works
An EMI (equated monthly instalment) is a fixed monthly payment that covers both interest and principal. Early in the loan most of each EMI is interest; towards the end most of it repays principal. Banks in India and most lenders worldwide use this reducing-balance method.
Tenure has a bigger effect than most borrowers expect. A longer tenure lowers the EMI but can nearly double the total interest. Prepaying even small amounts early in the loan cuts interest sharply.
The formula
- Monthly rate (r)
- annual rate ÷ 12 ÷ 100
- Months (n)
- tenure in years × 12
- EMI
- P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
- Total interest
- EMI × n − P
Worked example
For ₹30,00,000 at 8.5% over 20 years, r = 0.0070833 and n = 240. The EMI is about ₹26,035. Over 240 months you repay ₹62.48 lakh, of which ₹32.48 lakh is interest.
Tips
- 01Keep total EMIs below about 40–50% of take-home pay; lenders use similar limits.
- 02A 0.25% lower rate on a 20-year loan saves more than most fee waivers. Negotiate the rate first.
- 03If you prepay, ask the lender to reduce the tenure rather than the EMI to save the most interest.
Frequently asked questions
How is EMI calculated?
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), with P the loan amount, r the monthly interest rate (annual rate ÷ 12 ÷ 100) and n the number of monthly instalments.
Does a longer tenure reduce EMI?
Yes, but it increases the total interest you pay. A 30-year loan has a lower EMI than a 20-year loan at the same rate but costs much more overall.
Is the EMI the same for the whole loan?
For fixed-rate loans, yes. For floating-rate loans the lender may change the EMI or the tenure when the benchmark rate changes.
Can I use this for car or personal loans?
Yes. The same formula applies to any loan repaid in equal monthly instalments.