Key facts
- EMI = the fixed monthly payment that clears your loan with interest.
- Longer tenure means a smaller EMI but more total interest.
- Most home and car loans use the reducing-balance method.
- Early payments cut interest because interest is charged on the remaining balance.
EMI (Equated Monthly Instalment) is the fixed amount you pay your lender every month until the loan is cleared. This free EMI calculator shows your monthly payment, total interest and total payable for any loan amount, rate and tenure.
Enter the loan amount, the annual interest rate and the tenure in years. The monthly EMI appears instantly, with the full cost of the loan broken down below it.
How to use
- Enter the loan amount you plan to borrow.
- Enter the annual interest rate (e.g. 12).
- Enter the tenure in years.
- Read your EMI, total interest and total payable.
EMI formula
| Term | Meaning |
|---|---|
| P | Principal — the loan amount. |
| r | Monthly interest rate = annual rate ÷ 12 ÷ 100. |
| n | Number of monthly payments (years × 12). |
Worked examples
Car loan
1,000,000 at 12% for 5 years: r = 0.01, n = 60. EMI = 22,244 per month. Total interest = 334,667.
Longer tenure trade-off
Same loan over 7 years: EMI drops to 17,583, but total interest rises to 476,957. You pay 142,290 more for the comfort of a smaller instalment.
Tenure comparison (1,000,000 at 12%)
| Tenure | Monthly EMI | Total interest |
|---|---|---|
| 3 years | 33,214 | 195,703 |
| 5 years | 22,244 | 334,667 |
| 7 years | 17,583 | 476,957 |
| 10 years | 14,347 | 721,671 |
Frequently asked questions
What is the difference between flat rate and reducing balance?
Reducing balance charges interest on the remaining loan each month, so you pay less overall. Flat rate charges on the full original amount for the whole tenure — it looks cheaper but costs more. Always compare on a reducing-balance basis.
Does a longer tenure save money?
No — it lowers the monthly EMI but increases total interest. Choose the shortest tenure whose EMI fits your budget.
Should I prepay my loan early?
Usually yes. Extra payments go straight against the principal, cutting future interest. Check for prepayment penalties first.
Why does my first EMI contain mostly interest?
Because the balance is largest at the start. As you pay down principal, the interest share shrinks and the principal share grows — this is amortisation.
What is a good debt-to-income ratio?
Lenders like total EMIs under 40–50% of monthly income. Above that, one emergency can break the budget.
Key takeaways
- EMI depends on three things only: amount, rate and tenure.
- Shorter tenure = higher EMI but much less total interest.
- Compare loans on reducing-balance rate, and prepay when you can.
Explore more tools
Loan Calculator | Mortgage Calculator | Compound Interest Calculator
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