About emi calculator
An EMI (equated monthly instalment) is the fixed amount you pay every month until a loan is cleared. Understanding how it is built helps you compare offers and see what a loan really costs, not just what the monthly figure looks like.
The formula
This calculator uses the standard reducing-balance formula: EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1). P is the loan amount, r is the monthly interest rate (yearly rate ÷ 12 ÷ 100) and n is the number of months. If the rate is 0%, the EMI is simply P ÷ n.
A worked example
Take a ₹10,00,000 loan at 9% a year for 5 years. The monthly rate is 0.75% and n is 60, which gives an EMI of about ₹20,758. Over 60 months you pay roughly ₹12,45,500 in total, so about ₹2,45,500 of that is interest.
Why the early years are mostly interest
Interest is charged on the balance still owed, which is highest at the start. In the first instalments most of the EMI goes to interest and only a little reduces the principal. The year-by-year table shows this shift: principal paid grows every year while interest paid shrinks.
Ways to lower the total interest
- Choose a shorter tenure. The EMI rises but total interest falls sharply.
- Make part-prepayments early, when the outstanding balance is large.
- Compare offers on total payment, not on EMI alone, and ask about processing fees and prepayment charges.
