EMI Calculator - Equated Monthly Installment
Enter your loan amount, annual interest rate, and tenure to instantly calculate your Equated Monthly Installment (EMI). See the exact split of principal versus interest in every payment, your total interest cost, and a full amortization schedule. Switch between monthly and yearly schedule views as you type.
What is an EMI?
An Equated Monthly Installment (EMI) is the fixed amount a borrower pays to a lender on a specific date each month until the loan is fully repaid. Each EMI comprises two parts: an interest component, calculated on the outstanding loan balance, and a principal component, which reduces the balance owed. In the early months of a loan, the majority of each EMI goes toward interest. As the balance falls, a progressively larger share of each payment goes toward the principal. This is called an amortizing loan structure and is the standard for home loans, car loans, and personal loans across India and many other countries.
How the EMI formula works
The standard EMI formula is: EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the principal loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly installments. The formula works by distributing both the repayment of the principal and the interest charges into equal monthly payments, so you never pay more or less in any given month. For example, a loan of 10,00,000 at 8.5% per annum for 20 years gives a monthly rate of 0.7083%, and with n = 240 payments, the EMI works out to approximately 8,678 per month.
EMI in Advance versus EMI in Arrears
Most loans use EMI in Arrears: the first payment falls one full month after the loan is disbursed, and you pay n installments over the stated tenure. Some vehicle finance products use EMI in Advance: the first payment is due on the date of disbursement itself, which slightly reduces the effective principal the lender carries and therefore results in a marginally lower EMI than the arrears version for the same loan amount, rate, and tenure. If you are comparing a car loan quote to your own calculation, confirm with the lender which scheme applies.
Factors that affect your EMI
Three variables drive your EMI: the principal, the interest rate, and the tenure. Increasing the principal or the interest rate raises the EMI proportionally, while extending the tenure reduces the monthly payment but raises total interest paid considerably. A higher credit score typically secures a lower interest rate, which can meaningfully reduce the EMI and total cost. Prepayments made during the loan reduce the outstanding principal, which either shortens the remaining tenure or lowers the EMI depending on the lender's policy. Floating-rate loans see the EMI or tenure change when the benchmark rate is revised.
EMI for a 10 lakh loan at common rates and tenures
| Annual Rate | 10 Years | 15 Years | 20 Years | 25 Years | 30 Years |
|---|---|---|---|---|---|
| 7.0% | 11,611 | 8,988 | 7,753 | 7,068 | 6,653 |
| 8.0% | 12,133 | 9,557 | 8,364 | 7,718 | 7,338 |
| 8.5% | 12,399 | 9,847 | 8,678 | 8,052 | 7,689 |
| 9.0% | 12,668 | 10,143 | 9,000 | 8,392 | 8,046 |
| 10.0% | 13,215 | 10,746 | 9,650 | 9,087 | 8,776 |
| 11.0% | 13,775 | 11,366 | 10,322 | 9,801 | 9,523 |
| 12.0% | 14,347 | 12,001 | 11,011 | 10,532 | 10,286 |
Monthly EMI amounts (in INR) for a principal of 10,00,000. Use these as quick reference benchmarks.
Frequently asked questions
What does EMI stand for and what does it include?
EMI stands for Equated Monthly Installment. Each EMI payment includes two parts: an interest component (calculated on the outstanding loan balance at the monthly rate) and a principal component (which reduces the amount still owed). The two components add up to the same fixed EMI every month, though their individual proportions shift over time - interest is high early on and falls as the balance decreases.
Why does most of my early EMI go to interest and not principal?
Because interest is charged on the outstanding balance, and the balance is highest at the start of the loan. In month 1 the lender charges interest on the full principal. As the principal slowly reduces, each subsequent month's interest charge falls slightly, allowing more of the fixed EMI to pay off principal. This is the nature of amortizing loans and is reflected in the amortization schedule above.
Will a longer loan tenure always reduce my EMI?
Yes, a longer tenure reduces the monthly EMI because the same principal is spread over more payments. However, it also dramatically increases the total interest you pay. For example, stretching a 10 lakh loan at 8.5% from 10 years to 20 years cuts the EMI from about 12,399 to 8,678, but more than doubles the total interest cost. Choosing the shortest tenure you can comfortably afford is generally the best financial decision.
How does a prepayment affect my EMI?
Making a lump-sum prepayment reduces the outstanding principal immediately, which in turn reduces the interest charged in all future months. Most lenders either reduce your remaining tenure (keeping the EMI the same) or reduce the EMI (keeping the tenure the same). Reducing tenure saves more interest overall. Check your loan agreement for any prepayment penalty clauses, which are now capped or banned for floating-rate retail loans in India.
Is the EMI for a floating-rate loan fixed?
Initially yes, but it can change. For floating-rate loans tied to a benchmark like the RBI repo rate or MCLR, lenders revise the rate when the benchmark changes. Many lenders absorb small rate changes by adjusting the tenure rather than the EMI, but a large rate rise may result in the EMI itself being revised upward. Your loan sanction letter will state the reset terms.
What is the difference between flat rate and reducing-balance EMI?
A flat-rate loan calculates interest on the original principal for the entire tenure, making the effective cost much higher than the stated rate. A reducing-balance (or diminishing-balance) loan - which is what this calculator uses - applies interest only to the outstanding balance each month, so the interest charge falls as you repay. Reducing-balance is the standard for home and personal loans; flat rates sometimes appear in informal lending or older vehicle loan offers.