Loan EMI Calculator

What an EMI is

An Equated Monthly Installment is the fixed amount a borrower pays each month on a fixed-rate amortising loan: the same number every month for the entire tenure. Each payment splits between interest, charged on the outstanding balance, and principal, which reduces that balance. Early payments are mostly interest because the balance is large; later payments are mostly principal because the balance has fallen. The arithmetic is the standard amortisation formula used by fixed-rate consumer loans worldwide.

The term EMI is widely used in South Asian markets and increasingly elsewhere; where a lender says monthly mortgage payment or fixed monthly loan payment instead, the underlying calculation is identical. What does differ between products is whether the rate is fixed at all: on a fixed-rate loan the rate is set when the loan is taken out and does not change, while an adjustable-rate loan can move up or down. This calculator models the fixed case.

How to use it

Enter the loan principal, the annual interest rate, and the tenure in months. The calculator returns the monthly EMI, the total repaid across the full tenure, the total interest paid, and the interest expressed as a percentage of the principal for context. The currency selector at the top changes formatting only, since the arithmetic is currency neutral: the same principal, rate and tenure produce the same proportional result in any currency.

Worked example

Picture a 100,000 loan at 9% APR over 60 months, in whatever currency is selected. The monthly rate is 9% divided by 12, or 0.75%. Running that through the EMI formula gives a monthly payment of 2,075.84. Across 60 payments that comes to 124,550.13 in total, of which 24,550.13 is interest, or 24.55% of the original principal.

Double the tenure to 120 months at the same rate and the EMI drops to 1,266.76, a fall of 39%, while total interest climbs to 52,010.93, about 112% more than the five-year case. That gap between a 39% lower payment and 112% more interest is the whole trade-off in one line.

How the math works

EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1) where P is the principal, r is the monthly interest rate (annual ÷ 12 ÷ 100), and n is the tenure in months. Total repayment = EMI × n. Total interest = total repayment − principal. The formula treats interest as compounding monthly within the loan and assumes equal monthly payments throughout. The formula box below reproduces the expression in standard notation.

Tenure trade-off

Lowering the EMI by extending the tenure trades short-term affordability for total cost, and the exchange rate between the two is worse than it looks. Doubling the tenure drops the EMI by less than half in every case, while total interest at least doubles: from almost exactly 100% more at very low rates to over 130% more at high ones.

The reason is simple enough. A longer tenure leaves the principal outstanding for longer, and interest accrues on whatever is still owed. Running the calculator at three or four tenure points makes the shape of that curve clearer than any general rule.

Why a lender’s actual EMI may differ

This calculator returns the headline arithmetic. A lender’s actual EMI can differ because some include a processing fee inside the EMI, some round to a convenient whole number in the local currency, and some apply a daycount convention that differs from strict monthly compounding. Disclosure rules in many markets exist precisely so these differences are visible before signing: European Commission consumer credit rules require lenders to quote a standardised annual percentage rate expressing the total cost of the credit, so competing offers can be compared on the same basis. For any specific quote the lender’s offer document is authoritative, not a calculator.

What this calculator doesn’t capture

Processing fees, prepayment provisions, late-payment behaviour, variable-rate loans where the payment adjusts at reference-rate resets, insurance products bundled into the loan, and tax treatment that varies by country and product type are all outside this calculation. The figures are an estimate of the headline EMI from the three inputs entered, useful as a baseline before lender-specific terms are layered on.