Quick start
- Enter the amount you are borrowing.
- Enter the yearly interest rate as a percent, such as 9.5.
- Enter the number of years, then read the EMI, the total interest and the schedule.
The EMI formula
EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1). P is the amount borrowed, r is the monthly interest rate (yearly rate ÷ 12 ÷ 100) and n is the number of months.
Example: a car loan
Borrow 500,000 at 9% a year for 5 years. The monthly rate is 0.75% and there are 60 payments. The EMI comes to about 10,379. Over five years you pay about 622,750 in total, so the interest is roughly 122,750.
Where your money goes
Each month's interest is charged on the balance still owed. In the early years the balance is high, so a large part of each EMI is interest. Later, the same EMI pays off much more principal. That is why prepaying early in a loan saves the most interest.
Shorter or longer term?
A longer term makes the EMI smaller but the total interest much bigger. Try the same loan over 3, 5 and 7 years to see the trade-off before you choose.
Common questions
What does EMI mean?
Equated monthly instalment: the same payment every month, covering both interest and principal.
Are processing fees included?
No. The result covers principal and interest only. Add any fees or insurance separately.
Does it work for home loans?
Yes, for any fixed-rate loan. For floating rates the EMI changes when the rate changes.
Is this financial advice?
No. It shows the math. Confirm the exact figures with your lender.