Loan EMI calculator

How to calculate your loan EMI

EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r the monthly interest rate (annual rate ÷ 12 ÷ 100) and n the number of monthly installments. A 1,000,000 (10 lakh) loan at 9% a year for 5 years has an EMI of 20,758.36. The formula fits any fixed-rate loan repaid monthly on a reducing balance.

Each installment first pays the month's interest on the balance still owed, and the rest repays principal. Interest takes the largest share of the early EMIs and a smaller share with every payment.

EMI formula worked step by step

Take the same 10 lakh personal loan at 9% a year for 5 years.

1. Monthly rate: r = 9 ÷ 12 ÷ 100 = 0.0075.
2. Number of installments: n = 5 × 12 = 60.
3. Growth factor: (1 + r)^60 = 1.565681.
4. First month's interest: 1,000,000 × 0.0075 = 7,500.00.
5. EMI: 7,500.00 × 1.565681 ÷ (1.565681 − 1) = 20,758.36.

The first EMI repays 13,258.36 of principal and leaves 986,741.64 owed. Sixty installments total 1,245,501.31, so interest comes to 245,501.31, or 24.6% of the loan.

Multiplying the rounded EMI by 60 gives 1,245,501.60, which is 0.29 more than the exact total. A lender that rounds its EMI settles that difference in the last installment.

A lender's schedule can also differ because of fees, an irregular first period or a variable rate. On a US disclosure, the total of payments is the sum of the disclosed payment schedule (12 CFR 1026.18(h)).

Personal loan and home loan EMI examples

These rates are illustrative inputs, not current lender offers. Amounts are in the loan's own currency.

A personal loan and a home loan use the same formula; at 0% interest the EMI is simply the loan divided by the months. A home loan EMI covers principal and interest only, so property tax, insurance and other ownership costs need a separate budget.

For a loan you are already repaying, use the outstanding principal and the months left, not the original amount and term.

EMI per lakh by tenure and interest rate

EMI for every 100,000 (1 lakh) borrowed. Multiply by the loan size: a 35 lakh loan at 8.5% for 20 years is 35 × 867.82, about 30,374.

Doubling the tenure from 5 to 10 years cuts the EMI by about 40%. Going from 20 to 30 years cuts it by only 11%, while interest rises from 108% to 177% of the loan.

Each extra five years saves less. At 8.5%, the EMI per lakh falls by 116.92 from 15 to 20 years, by about 63 from 20 to 25 and by about 36 from 25 to 30.

Flat rate vs reducing balance rate

A flat rate charges interest on the original loan for the whole tenure: EMI = loan × (1 + flat rate × years) ÷ months. A reducing balance rate charges interest only on what is still owed, which is what the EMI formula assumes.

For 2 lakh at 8% flat over 3 years, interest is 48,000 and the EMI is 248,000 ÷ 36 = 6,888.89. The reducing rate that gives the same EMI is 14.55%.

To convert any other flat quote, work out its EMI with the flat formula, then find the reducing rate that produces the same EMI. The spreadsheet RATE check below does exactly that.

Prepayment: lower EMI or shorter tenure?

A prepayment goes straight to principal after that month's interest is charged, so it removes all the interest that amount would have accrued. The lender then either keeps the EMI and shortens the loan, or keeps the end date and lowers the EMI.

Take a 50 lakh (5,000,000) home loan at 8.5% for 20 years: EMI 43,391.16, total interest 5,413,878.80. Suppose you prepay 5 lakh with the 36th installment.

Keeping the EMI saves almost three times as much, because the full installment keeps going to a smaller balance. Paying 5,000 extra with every EMI from the first month instead ends the loan after 187 months and saves 1,389,249.71.

The calculator's prepayment options keep the EMI and shorten the loan. To price the lower-EMI option, treat the balance after prepaying, 4,174,300.42, as a new loan over the 204 months left.

These savings are before any prepayment charge. In India, RBI rules bar prepayment charges on floating-rate loans to individuals for non-business purposes.

When a floating rate resets

When the benchmark on a floating-rate loan rises, the lender raises the EMI, extends the tenure, or both.

The Reserve Bank of India's 2023 circular covers EMI-based floating-rate personal loans, which in RBI's definition include home, education and consumer loans to individuals. It requires lenders to:

• explain at sanction how a rate change can alter the EMI, the tenure or both;
• let the borrower choose a higher EMI, a longer tenure or a mix at reset, and allow prepayment at any time;
• make sure a longer tenure does not cause negative amortization, where the EMI no longer covers the interest;
• send a quarterly statement showing principal and interest recovered, the EMI, the EMIs left and the annualized rate.

Offering a switch to a fixed rate at reset has been at the lender's option since 1 October 2025, when RBI replaced "shall" with "may, at its option" in the circular.

Take the 50 lakh loan without the prepayment. After 36 EMIs the balance is 4,674,300.42. If the rate rises to 9.5%, keeping the tenure lifts the EMI by 2,874.16 to 46,265.32.

Keeping the old EMI instead adds 39 months. Lifetime interest then reaches 7,105,740.56, against 6,000,207.28 with the higher EMI: 1,105,533.28 more.

At 11.14%, the old EMI would no longer cover a month's interest on that balance. From that rate up, extending the tenure alone cannot absorb a rise. To model any reset, use the outstanding balance, the new rate and the months left.

Check an EMI in Excel or Google Sheets

Both have the same three functions. Give the rate per month, and enter the money you receive as a negative number so the answer comes out positive.

• =PMT(9%/12, 60, -1000000) returns 20,758.36, the EMI from the worked example.
• =NPER(9.5%/12, -43391.16, 4674300.42) returns 242.99, so after the reset above, keeping the old EMI takes 243 more installments.
• =RATE(36, -6888.89, 200000)*12 returns 14.55%, the reducing-balance equivalent of the 8% flat quote.

Mistakes that give the wrong EMI

• A monthly rate entered as annual. A quoted 1% a month is a 12% nominal annual rate, because the formula divides the annual rate by 12. On the 10 lakh, 5-year loan, using 1 instead of 12 gives an EMI of 17,093.75 instead of 22,244.45.
• Tenure in the wrong unit. Sixty years is a 720-month loan; a 60-month loan is 5 years.
• A fee-inclusive APR or a flat rate. The formula needs the contractual reducing-balance rate. Convert a flat quote with the table above, and compare APRs and itemized fees separately.
• Fees in the loan amount. Add fees or insurance premiums to the principal only when they are financed. Charges paid upfront sit outside the EMI.

To see how much you can borrow for a given EMI, use the loan affordability calculator. For a home loan with property tax, insurance and PMI, use the mortgage calculator.

With several loans to clear, the debt snowball vs avalanche calculator orders them, and the refinance calculator tests whether moving a loan to a lower rate pays for its costs.