Calculate your monthly EMI, total interest, and full amortization schedule for any loan.
Rates as of Q2 2025 (example)
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An EMI (Equated Monthly Instalment) calculator computes the fixed monthly payment for a loan based on the principal amount, interest rate, and tenure. It is the most commonly used financial tool in India for planning any kind of borrowing — home loans, personal loans, car loans, business loans, education loans, gold loans, or any other term credit facility. This general-purpose EMI calculator can be used for any loan type: simply enter the loan amount, interest rate, and tenure, and instantly get the EMI amount, total interest payable, and a complete month-by-month amortization schedule.
Indian banks and NBFCs use the monthly reducing balance method for all retail term loans. Each EMI covers (1) the interest due on the outstanding principal for that month and (2) a principal repayment. As the principal reduces with each EMI payment, the interest component of each subsequent EMI decreases — the principal component increases.
Formula: EMI = [P × R × (1 + R)N] ÷ [(1 + R)N − 1], where P = principal loan amount, R = monthly interest rate (annual rate ÷ 12 ÷ 100), N = total number of monthly instalments.
Example: ₹5,00,000 loan at 10% per annum (example rate — enter your actual loan rate), 5-year tenure: Monthly EMI ≈ ₹10,623.60. Total interest ≈ ₹1,37,416.03. Total repayment ≈ ₹6,37,416.03. (Note: this is illustrative — enter your specific loan amount and rate for an accurate estimate.)
The EMI (Equated Monthly Instalment) is the fundamental repayment structure for virtually all retail loans in India. From home loans running for 20-30 years to consumer durable loans for 6-12 months, the reducing balance EMI is mandated by RBI guidelines as the standard for retail and MSME loans from regulated lenders. The EMI concept distinguishes the Indian (and most Asian) credit market from the US "amortizing loan" structure — the mathematical formula is identical, but in India the term "EMI" is used universally. Key characteristics of EMI-based loans in India: the EMI amount is fixed for the loan tenure (for fixed-rate loans); the interest component of each EMI decreases while the principal component increases over time; floating rate loans (linked to EBLR/Repo Rate) may have EMI changes when the RBI revises the Repo Rate. Since October 2019, all new floating rate retail and MSME loans from banks must be linked to an External Benchmark Lending Rate (EBLR) — typically the RBI Repo Rate — ensuring faster transmission of rate changes. This means when the RBI cuts rates, existing EBLR-linked borrowers see their EMI or tenure adjust within the next reset cycle. For fixed rate loans, the EMI is locked for the entire tenure regardless of market rate changes. The amortization schedule (available from this calculator) shows the exact split between principal and interest for each EMI — useful for tracking loan progress and planning prepayments.
EMI stands for Equated Monthly Instalment — a fixed monthly payment that covers both the monthly interest on the outstanding principal and a portion of the principal itself. EMI uses the reducing balance method: interest is charged only on the outstanding principal (which decreases with each payment), not on the original loan amount. Simple interest would charge interest on the original amount throughout the tenure — the EMI method is more borrower-friendly. Flat rate loans (sometimes offered by some NBFCs and cooperative societies) calculate interest on the full principal for the entire tenure — these have a higher effective interest rate than the reducing balance method at the same stated rate.
In a reducing balance EMI, interest is charged each month only on the outstanding principal balance — not on the original loan. As each EMI is paid, part of it goes toward reducing the principal. The reduced principal then accrues less interest next month. This is why the interest portion of each EMI is high in the early months and low in the later months, while the principal portion is low initially and high at the end. In the early years of a long-term loan (like a 20-year home loan), most of the EMI is interest — the principal reduces slowly. This is why prepayment in the early years of a loan has the most dramatic impact on total interest saved.
Reducing balance EMI (also called diminishing balance): interest is charged on the outstanding principal each month. As principal decreases, monthly interest decreases. This is the RBI-mandated method for all bank retail loans. Flat rate EMI (also called add-on rate): interest is calculated on the full original principal for the entire tenure and added to the principal, then divided by the number of months. A flat rate of 10% is equivalent to approximately 18-19% on a reducing balance basis for a 3-5 year tenure — significantly more expensive. Always convert flat rates to effective reducing balance rates for fair comparison. NBFCs, finance companies, and some cooperative banks may still quote flat rates.
When you make a part-prepayment on an Indian bank loan, the lender typically gives you the option to: (1) reduce the EMI while keeping the tenure constant, or (2) keep the EMI constant and reduce the remaining tenure. Option 2 (keep EMI, reduce tenure) is generally more financially beneficial as it saves more total interest. Some banks automatically reduce the tenure; others require you to specify your preference. For floating rate loans (home loans linked to EBLR), prepayment is free for individual borrowers per RBI guidelines. For fixed rate loans, prepayment charges may apply (typically 2-5% of prepaid amount).
FOIR (Fixed Obligation to Income Ratio) is the ratio of your total monthly fixed debt obligations (all EMIs: home loan, car loan, personal loan, credit card minimum, etc.) to your gross monthly income. Most Indian banks require FOIR to be below 40-55% for loan approval. For example: gross monthly income ₹80,000, existing EMIs ₹20,000 (FOIR = 25%), new home loan EMI ₹25,000 → total FOIR = 56.25%. This may exceed the bank's limit. To reduce FOIR: pay off smaller existing loans before applying for a new large loan; increase income; or reduce the loan amount to lower the EMI. FOIR is the most commonly binding constraint on home loan and personal loan eligibility.
The amortization schedule shows the month-by-month breakdown of each EMI into principal and interest, and the outstanding balance after each payment. It is useful for: (1) Understanding how much of your early EMIs go toward interest vs principal — this motivates prepayment in the early loan years when impact is greatest. (2) Planning partial prepayments: look at the outstanding balance at the end of each year to plan annual prepayments from bonuses or increments. (3) Tax planning for home loans: the schedule shows how much interest you paid in each financial year (for Section 24(b) deduction claims) and the principal repaid (for Section 80C claims).
Disclaimer: This calculator provides illustrative EMI estimates for any loan type. Actual EMI, interest rate, and total cost depend on the lender, loan type, your credit profile, and current market rates. For floating rate loans linked to EBLR/Repo Rate, the EMI may change when the RBI revises the Repo Rate. Always verify the exact EMI and total cost with your lender before committing to a loan.