Personal loan
Input
Loan amount: 500,000, Rate: 12%, Tenure: 60 months
Expected result
Monthly EMI: 11,122.22 — Total interest: 167,333.43 — Total payment: 667,333.43
Calculators
Loan EMI Calculator
Monthly loan EMI and amortisation
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About this tool
An Equated Monthly Instalment (EMI) is the fixed amount you pay every month for the life of a loan, covering both principal repayment and interest. This calculator uses the standard reducing-balance EMI formula — EMI = [P × r × (1+r)^n] / [(1+r)^n − 1] — where P is the loan principal, r is the monthly interest rate, and n is the number of monthly payments. Enter any home, auto, personal or education loan amount, the annual rate and the tenure in months to see your monthly payment, the total amount you will repay, the total interest, and what share of your repayments goes to interest. That lifetime interest figure is often surprisingly large and a strong argument for a shorter tenure when cash flow allows. Results update as you type; amounts are labelled in dollars, but the maths works for any currency. Estimates exclude fees and taxes.
Why use it
Bank-standard EMI Formula: Uses the reducing-balance formula EMI = [P × r × (1+r)^n] / [(1+r)^n − 1], the same calculation lenders use, so results should match your loan quote before fees.
Total Interest Cost Visibility: The headline EMI hides the real cost of borrowing. The tool shows lifetime interest and its share of total repayment so you can make an informed decision before signing.
Quick Tenure Comparisons: Change the months field and the EMI and total interest update instantly, which makes it easy to see the trade-off between a lower monthly payment and a higher lifetime cost.
Zero-rate Loans Handled: A 0% rate simply divides the amount by the number of months, so interest-free instalment offers work too.
Currency-agnostic: The display shows $, but the mathematics is purely numerical, so it works for ₹, £ or € loans as well.
How to use
- Enter the loan amount — the amount you are borrowing, not including any fees
- Enter the annual interest rate in percent as quoted by the lender, for example 9.5
- Enter the tenure in months — for example 240 for a 20-year loan
- Read the monthly EMI, total payment and total interest, which update as you type
- Check the line below the results to see what percentage of your total repayment is interest
When it helps
- When comparing home loan offers from two or three banks at different rates or tenures before choosing a lender
- When you want to see the full lifetime interest cost of a loan before signing the sanction letter
- When planning a personal or auto loan and need to check whether the monthly EMI fits your budget
- When a floating interest rate changes and you need to recalculate the new EMI
- When deciding between two tenures for an education or car loan
Examples
Home loan
Input
Loan amount: 300,000, Rate: 6.5%, Tenure: 360 months
Expected result
Monthly EMI: $1,896.20 — Total interest: $382,633.47 — Total payment: $682,633.47
Auto loan
Input
Loan amount: 25,000, Rate: 7.9%, Tenure: 60 months
Expected result
Monthly EMI: $505.71 — Total interest: $5,342.85 — Total payment: $30,342.85
Tips
- A shorter tenure means a higher EMI but substantially lower lifetime interest — run both options and compare the total payment before deciding
- Convert years to months before entering the tenure — 15 years is 180 months
- Compare the Annual Percentage Rate (APR), which includes processing fees, not just the headline interest rate when choosing between lenders
- After a partial prepayment, re-enter the remaining balance and months to see your new EMI
- If you have a floating-rate loan, recalculate with the new rate after every revision
Frequently Asked Questions
What is the EMI formula?
EMI = [P × r × (1+r)^n] / [(1+r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate divided by 12 and divided by 100), and n is the number of monthly instalments. This is the standard reducing-balance formula used by commercial banks.
How does loan tenure affect total interest paid?
A longer tenure reduces the monthly EMI but increases total interest because interest accrues for more months. For example, $300,000 at 6.5% over 360 months costs about $382,600 in interest. Choosing a shorter tenure always saves money if the higher EMI is affordable.
What is amortisation?
Amortisation is the process of paying off a debt through scheduled periodic payments. Each EMI payment is split between interest (calculated on the outstanding balance) and principal reduction. This tool shows the totals, not a month-by-month schedule.
Should I make a prepayment or invest the surplus?
If your loan interest rate exceeds your expected post-tax investment return — which is common for personal and auto loans — prepayment is usually the better use of surplus cash. The tool does not model prepayments, but you can re-run it with the reduced balance and remaining months to see the new EMI.
Is the rate I enter annual or monthly?
Enter the annual rate as quoted by your lender. The calculator divides it by 12 internally to get the monthly rate used in the formula.
Why is the tenure in months?
The EMI formula works in monthly periods, so the tool asks for the number of monthly payments directly. Multiply years by 12 — a 5-year loan is 60 months and a 30-year loan is 360.
Does this include processing fees or insurance?
No. The calculator shows the pure EMI based on principal, rate, and tenure. To factor in a one-time fee that is added to the loan, include it in the loan amount.
What is the difference between flat and reducing-balance interest?
Flat-rate interest calculates interest on the full original principal throughout the tenure, making the effective rate much higher than the quoted rate. Reducing-balance interest (used in this calculator) calculates interest only on the outstanding principal each month, which is the method used by mainstream banks for home, auto, and personal loans.
Explore the category
Glossary
- EMI (Equated Monthly Instalment)
- A fixed monthly payment amount that covers both the interest due and a portion of the principal. EMIs are structured so the loan is fully repaid by the end of the tenure with equal payments each month.
- Principal
- The original loan amount borrowed, excluding interest and fees. As monthly EMIs are paid, the outstanding principal decreases. Interest each month is calculated only on the remaining outstanding principal, not the original amount.
- Tenure
- The total duration of the loan, usually expressed in years or months. A longer tenure lowers the monthly EMI but increases the total interest paid. A shorter tenure does the opposite.
- Interest Rate
- The cost of borrowing expressed as a percentage per year (per annum). In EMI calculations, the annual rate is converted to a monthly rate by dividing by 12. Reducing-balance rates are always compared on this basis.
- Amortisation Schedule
- A complete table showing every monthly payment broken into its principal and interest components, along with the outstanding loan balance after each payment. It shows how the loan balance gradually decreases to zero by the final EMI.
- Outstanding Balance
- The remaining principal owed on a loan at any point in time. Interest for each period is calculated only on the outstanding balance, which is why the interest share of each EMI falls and the principal share rises over the loan's life.
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