What Is EMI?
EMI (Equated Monthly Installment) is a fixed payment you make every month on many loans — especially common in India and similar markets for home loans, car loans, and personal loans.
Each EMI contains interest (on the remaining balance) and principal (reducing the balance). The split changes every month, but the EMI amount stays constant for a standard fixed-rate loan.
EMI Formula
The same amortizing payment formula applies as for other installment loans:
EMI = P × r × (1+r)^n / ((1+r)^n − 1)
- •P = principal loan amount
- •r = monthly interest rate (annual rate ÷ 12)
- •n = number of monthly installments
Example: ₹10,00,000 loan at 9% per annum for 20 years (n = 240):
- •
r = 0.09/12 = 0.0075 - •EMI ≈ ₹8,997 per month (before rounding)
Use the calculator to avoid manual errors.
Factors That Change Your EMI
| Factor | Effect on EMI |
|---|---|
| Higher principal | Higher EMI |
| Higher interest rate | Higher EMI |
| Longer tenure | Lower EMI (but more total interest) |
| Part prepayment | Can reduce EMI or tenure (lender rules) |
Floating rate loans: if the bank changes your rate, EMI or tenure may be adjusted per your loan agreement.
Prepayment and Foreclosure
Part prepayment reduces principal, saving interest. Some loans allow you to choose lower EMI or shorter tenure after prepayment.
Full foreclosure pays off the entire balance early — check for charges or lock-in periods.
RBI and bank policies change over time — always read your sanction letter and current rules.
How to Use This EMI Calculator
Enter loan amount, annual interest rate, and tenure in months or years. The tool shows EMI, total interest, and total payment so you can compare loan offers and tenures before you sign.