Use this free EMI calculator to work out the monthly instalment, total interest and total cost of a home loan, car loan or personal loan, and to simulate pre-payments and mid-tenure interest-rate changes.
Rate-change impact simulator
See what a mid-tenure interest-rate change does to your EMI and total interest.
How this works
EMI uses the standard reducing-balance formula: EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the loan amount, r the monthly rate (annual rate / 12 / 100) and n the number of months. Pre-payments reduce principal directly, saving all future interest on that amount. Estimates only; confirm exact figures with your lender.
How the EMI is calculated
Every bank in India uses the same reducing-balance formula: EMI = P × r × (1+r)n ÷ ((1+r)n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly instalments. Interest is charged only on the outstanding principal, so early EMIs are mostly interest and later EMIs are mostly principal.
Worked examples
| Loan | Amount | Rate | Tenure | EMI | Total interest |
|---|---|---|---|---|---|
| Home loan | ₹50 lakh | 8.5% | 20 years | ₹43,391 | ₹54.14 lakh |
| Car loan | ₹8 lakh | 9% | 5 years | ₹16,607 | ₹1.96 lakh |
| Personal loan | ₹3 lakh | 13% | 3 years | ₹10,108 | ₹63,895 |
The home loan example shows why tenure matters so much: over 20 years you pay more in interest than you borrowed. Cutting the tenure to 15 years raises the EMI but saves several lakh in interest.
Three things that change your EMI after you borrow
- Rate resets. Most home loans are linked to the repo rate. When RBI changes the repo rate, your bank usually extends the tenure rather than raising the EMI. Use our repo rate impact calculator to see the difference.
- Prepayments. A lump-sum part-payment reduces the principal immediately. On floating-rate loans taken by individuals, banks cannot charge a prepayment penalty. See the loan prepayment calculator.
- Switching lenders. A lower rate elsewhere can cut your EMI or tenure; check whether it beats the switching cost with the balance transfer calculator.
How much EMI is safe?
Lenders typically cap all EMIs together at 40–50% of take-home pay. A more comfortable personal rule is to keep total EMIs below 35–40%, so a job change or medical bill does not push you into missing payments. The home loan eligibility calculator shows how much a bank is likely to lend.
FAQs
Is EMI the same every month?
Yes for a fixed rate. For a floating-rate loan the EMI stays the same until the rate changes, after which the bank adjusts the tenure or the EMI.
Does a longer tenure make a loan cheaper?
No. It lowers the monthly EMI but increases the total interest you pay.
Why does my first EMI have so little principal?
Interest is charged on the full outstanding amount, which is highest at the start, so most of the early EMIs go to interest.
Figures last checked October 2026. Calculator results are estimates; actual lender, fund or tax outcomes can differ.