EMI Calculator
Your free online EMI Calculator - calculate loan payments in just a few clicks.
EMI Calculator FAQ
What is an EMI Calculator?
An EMI Calculator is a financial tool that helps you determine the equated monthly installment (EMI) for your loan based on the principal amount, interest rate, and loan tenure. It provides a clear breakdown of your loan repayment schedule, showing how much of each payment goes toward the principal versus interest.
How is EMI calculated?
EMI is calculated using the formula: EMI = P × r × (1+r)^n / [(1+r)^n-1], where P is the loan amount, r is the interest rate per month, and n is the number of monthly installments. This formula ensures that you pay the same amount each month while gradually reducing the principal balance.
How can this EMI Calculator help me?
Our EMI Calculator helps you plan your finances better by allowing you to see exactly how much you'll need to pay monthly for your loan. It helps you determine if a loan is affordable based on your current income, compare different loan options with varying interest rates and tenures, and understand the total interest cost over the life of the loan.
How do I reduce my EMI amount?
You can reduce your EMI by: (1) Extending your loan tenure (though this increases total interest paid), (2) Making a larger down payment to reduce the principal amount, (3) Finding a loan with a lower interest rate, or (4) Prepaying a portion of your loan when you have extra funds available.
Does a longer loan tenure mean lower interest cost?
No, a longer loan tenure actually increases your total interest cost. While it does reduce your monthly EMI amount, you end up paying interest for a longer period. You can use our calculator to see how changing the tenure affects both your monthly payment and total interest paid.
How accurate is this EMI Calculator?
Our EMI Calculator provides an accurate estimate based on the standard EMI formula used by most financial institutions. However, the actual EMI may vary slightly depending on the exact method used by your lender, additional fees or charges, and whether the interest is calculated on a reducing balance or flat rate basis.
Types of Loans & Their Typical Interest Rates
| Loan Type | Interest Rate Range | Typical Tenure | Features |
|---|---|---|---|
| Home Loan | 6.5% - 9.5% | 5 - 30 years | Tax benefits, lower interest rates, secured |
| Car Loan | 7.5% - 12.5% | 1 - 7 years | Quick approval, secured by vehicle |
| Personal Loan | 10.5% - 24% | 1 - 5 years | Unsecured, flexible usage, quick disbursal |
| Education Loan | 8% - 15% | 5 - 15 years | Tax benefits, moratorium period, collateral may be required |
| Business Loan | 11% - 30% | 1 - 10 years | Unsecured options available, tax-deductible interest |
| Gold Loan | 7.5% - 29% | 3 months - 3 years | Quick approval, minimal documentation, secured by gold |
Note: Interest rates are indicative and may vary based on credit score, lender, and market conditions.
Understanding Loan Terms
Principal Amount
The original sum of money borrowed from a lender or deposited in an investment. In loans, it's the amount on which interest is paid.
Interest Rate
The percentage charged on the principal by a lender for the use of their money. It can be fixed (stays the same) or floating (changes with market conditions).
Loan Tenure
The duration over which you agree to repay the loan in full, including principal and interest. Longer tenures mean lower EMIs but higher total interest cost.
EMI (Equated Monthly Installment)
A fixed payment amount made by a borrower to a lender at a specified date each month. EMI includes both principal and interest components.
Processing Fee
A one-time charge levied by the lender to process your loan application, typically 1-3% of the loan amount. This fee is not calculated in the EMI.
Prepayment Penalty
A fee charged by some lenders if you pay off your loan before the end of the term. It's important to check if your loan has this penalty before making extra payments.
EMI Calculation: Step by Step
Step 1: Gather Your Loan Information
Collect key details: the principal amount (P), annual interest rate (R%), and loan tenure in years or months (N).
Step 2: Convert the Values
Convert the annual interest rate to monthly (r = R% ÷ (12 × 100)). Ensure the tenure is in months (n = N × 12 if provided in years).
Step 3: Apply the EMI Formula
Use the standard EMI formula: EMI = P × r × (1+r)^n ÷ [(1+r)^n-1], where P is principal, r is monthly interest rate, and n is number of installments.
Step 4: Calculate Total Payment and Interest
Total Payment = EMI × n. Total Interest = Total Payment - Principal. These figures help you understand the true cost of your loan.
Example Calculation:
For a loan of ₹5,00,000 at 10% annual interest for 5 years:
- Monthly interest rate (r) = 10 ÷ (12 × 100) = 0.00833
- Number of installments (n) = 5 × 12 = 60 months
- EMI = ₹5,00,000 × 0.00833 × (1.00833)^60 ÷ [(1.00833)^60 - 1] = ₹10,624
- Total Payment = ₹10,624 × 60 = ₹6,37,440
- Total Interest = ₹6,37,440 - ₹5,00,000 = ₹1,37,440
