What is an EMI?
An EMI (Equated Monthly Instalment) is the fixed amount you pay your lender every month until a loan is fully repaid. Each EMI has two parts: interest on the amount still outstanding, and principal, which reduces the loan.
In the early years most of the EMI goes towards interest because the outstanding balance is high. As the balance falls, the interest part shrinks and more of each EMI repays the principal — the total EMI stays the same throughout.
EMI formula
Banks and NBFCs in India calculate EMIs on a reducing balance with this formula:
EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
- P = loan amount (principal)
- r = monthly interest rate = annual rate ÷ 12 ÷ 100
- n = tenure in months
Example: a loan of ₹10,00,000 at 10% a year for 10 years has r = 10 ÷ 12 ÷ 100 = 0.008333 and n = 120. Putting these into the formula gives an EMI of ₹13,215. Over 120 months you pay ₹15,85,809 in total, of which ₹5,85,809 is interest.
How to use this EMI calculator
- Enter the loan amount — type it in or use the slider. The amount is also shown in lakh / crore.
- Enter the interest rate offered by your bank, per year.
- Choose the tenure in years or months.
- Read your monthly EMI, total interest and total payment instantly. The chart shows how much of the total goes to interest.
- Scroll to the repayment schedule to see the principal, interest and balance for every year or month, and download it as a CSV file.
Use Copy link to share the exact calculation — the link opens with your numbers filled in.
EMI for a ₹10 lakh loan at different rates
| Interest rate | 5 years | 10 years | 15 years | 20 years |
|---|---|---|---|---|
| 8.5% | ₹20,517 | ₹12,399 | ₹9,847 | ₹8,678 |
| 9% | ₹20,758 | ₹12,668 | ₹10,143 | ₹8,997 |
| 10% | ₹21,247 | ₹13,215 | ₹10,746 | ₹9,650 |
| 11% | ₹21,742 | ₹13,775 | ₹11,366 | ₹10,322 |
| 12% | ₹22,244 | ₹14,347 | ₹12,002 | ₹11,011 |
A longer tenure lowers the EMI but raises the total interest sharply. At 10%, stretching the loan from 10 to 20 years cuts the EMI from ₹13,215 to ₹9,650 — but you repay about ₹23.16 lakh instead of ₹15.86 lakh.
What affects your EMI
- Loan amount — the EMI rises in direct proportion to the amount borrowed.
- Interest rate — even 0.5% makes a visible difference on long loans. Your rate depends on your credit score, income and the lender.
- Tenure — longer tenure means a smaller EMI but much more total interest.
- Rate type — floating-rate loans (most home loans) move with the bank's benchmark rate; when it changes, banks usually change the tenure first and the EMI only if you ask.
Ways to reduce your EMI or total interest
- Make a bigger down payment so you borrow less.
- Improve your credit score (750+) before applying — it helps you get a lower rate.
- Prepay whenever you can. Floating-rate home loans taken by individuals carry no prepayment penalty, and every prepayment cuts the remaining interest.
- Compare lenders and consider a balance transfer if another bank offers a clearly lower rate, after counting the processing fee.
- Choose the shortest tenure you can afford — the total interest falls fastest this way.
Reducing balance vs flat interest rate
This calculator — like banks for home, car and personal loans — uses the reducing balance method: interest is charged only on the amount still outstanding. Some lenders quote a flat rate, charging interest on the full original amount for the whole tenure. A flat rate of 10% costs roughly as much as an 18% reducing rate, so always ask for the reducing-balance rate or the APR before comparing offers.
Frequently asked questions
How is EMI calculated?
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 instalments. This calculator applies the formula instantly.
What is the EMI for a ₹10 lakh loan for 10 years?
At 10% a year, the EMI is ₹13,215 and the total interest ₹5,85,809. At 9% it is ₹12,668; at 11%, ₹13,775.
Does the EMI change during the loan?
Not for a fixed-rate loan. For a floating-rate loan, banks usually keep the EMI the same and change the remaining tenure when rates move, unless you ask them to change the EMI instead.
Is it better to choose a longer or shorter tenure?
A shorter tenure saves a lot of interest; a longer one keeps the EMI comfortable. A common rule is to keep all EMIs together under about 40–50% of your take-home pay and choose the shortest tenure within that.
Does prepaying a loan reduce the EMI?
Prepayment reduces the outstanding principal. Your bank will either shorten the remaining tenure (which saves more interest) or lower the EMI — you can usually choose.
Are processing fees and GST included in the EMI?
No. The EMI covers only principal and interest. Processing fees, insurance and GST on fees are paid separately, usually upfront.