What is an EMI?
An Equated Monthly Instalment (EMI) is the fixed payment you make to a lender every month to repay a loan — whether a home loan, car loan or personal loan. Each EMI is part interest and part principal. Early in the loan most of the payment is interest; as the balance falls, more of each EMI goes toward the principal, until the loan is fully paid off. This calculator works out your EMI, your total interest and a full month-by-month schedule, updated live as you type.
How EMI is calculated
EMIs use the reducing-balance method, where interest is charged only on the outstanding balance. The monthly payment is fixed by the formula:
EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
where P is the loan amount, r is the monthly interest rate (the annual rate divided by 12 and by 100), and n is the number of monthly instalments.
Worked example
Generated by the same engine that powers the calculator, for a 20-year home loan.
| Step | Value |
|---|---|
| Loan amount (P) | ₹10,00,000 |
| Interest rate | 8.5% per year |
| Tenure | 20 years (240 months) |
| Monthly EMI | ₹8,678 |
| Total interest | ₹10,82,777 |
| Total payment | ₹20,82,777 |
How tenure changes your EMI
A longer tenure makes each EMI smaller but increases the total interest you pay, because you owe the balance for longer. The trade-off, for the same loan:
| Tenure | Monthly EMI | Total interest |
|---|---|---|
| 10 years | ₹12,399 | ₹4,87,828 |
| 15 years | ₹9,847 | ₹7,72,530 |
| 20 years | ₹8,678 | ₹10,82,777 |
| 25 years | ₹8,052 | ₹14,15,682 |
| 30 years | ₹7,689 | ₹17,68,095 |
For a ₹10,00,000 loan at 8.5% p.a. A longer tenure lowers the EMI but raises total interest.
Frequently asked questions
What is EMI?+
EMI stands for Equated Monthly Instalment — the fixed amount you pay your lender each month, covering both interest and a part of the principal, until the loan is fully repaid.
How is EMI calculated?+
Using the 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 months.
What is the reducing-balance method?+
Interest is charged only on the outstanding balance, which shrinks with every payment. So early EMIs are mostly interest and later ones are mostly principal, even though the EMI stays the same.
Does a longer tenure reduce my EMI?+
Yes — spreading the loan over more months lowers each EMI, but you pay more total interest over the life of the loan. A shorter tenure means a higher EMI but less interest overall.
What is an amortisation schedule?+
A month-by-month table showing how each EMI splits between interest and principal and how the outstanding balance falls to zero. This calculator generates the full schedule.
How does the interest rate affect my EMI?+
A higher annual rate raises both your EMI and the total interest. Even a small rate difference can mean a large change over a long tenure like a 20-year home loan.
Can I reduce my EMI by prepaying?+
Prepayments reduce the outstanding principal, which lowers future interest. Depending on your lender you can then reduce the EMI or shorten the tenure. This calculator models the base schedule without prepayments.
Is EMI the same for home, car and personal loans?+
The formula is the same; only the typical loan amount, rate and tenure differ. Home loans run longest (up to ~30 years), personal loans are shortest with higher rates.
What happens at 0% interest?+
With no interest the EMI is simply the loan amount divided by the number of months, and the total interest is zero.
Does this include processing fees or insurance?+
No. The EMI here is purely principal plus interest. Lenders may add one-time processing fees, insurance or taxes, which are not part of the monthly EMI.
Sources
- Corporate Finance Institute — Equated Monthly Installment (EMI) formula
- Investopedia — Amortization (how each payment splits into interest and principal)
- ClearTax — EMI calculation formula (reducing-balance method)
Formula and data last reviewed by the TheCalculatorVault team on 26 June 2026. Figures are for general information, not professional advice.
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