EMI Calculator: how to use it
Estimate monthly loan instalments, total interest and total repayment from amount, interest rate and tenure, with the EMI formula explained.
Before you take a home, car, education or personal loan, the number that matters most is the monthly instalment, called the EMI (equated monthly instalment). The EMI Calculator estimates it from the loan amount, the yearly interest rate and the length of the loan, and shows how much interest you will pay over the whole term.
Seeing the total cost of a loan, not just the monthly figure, is the best protection against borrowing more than you can afford.
How to use the EMI Calculator
- Enter the Loan amount in rupees.
- Enter the Annual interest rate as a percentage.
- Enter the Loan tenure in years, and any Additional months.
- Press Calculate EMI.
- Read the Monthly EMI, Total interest, Total repayment and Number of payments.
Tips for better results
- A longer tenure lowers the EMI but raises the total interest. Compare two tenures before choosing.
- Example: Rs 10,00,000 at 9% for 10 years gives an EMI of about Rs 12,668, total interest of about Rs 5,20,109 and total repayment of about Rs 15,20,109.
- Example: Rs 5,00,000 at 10% for 5 years gives an EMI of about Rs 10,624 and total interest of about Rs 1,37,411.
- A good rule of thumb is to keep all your loan EMIs under roughly 40 to 50% of your monthly income.
The formula
EMI = P x r x (1 + r)^n / ((1 + r)^n - 1), where P is the loan amount, r is the monthly interest rate (annual rate divided by 12 and by 100) and n is the number of monthly payments. The total interest is EMI x n minus P.
Frequently asked questions
Will my bank show exactly the same EMI?
It may differ slightly because of rounding, processing fees, insurance, a floating interest rate or the exact date of the first instalment.
Does it show a repayment schedule?
No. It shows the summary figures. Ask your lender for the amortisation schedule.
Can I use it for any currency?
Yes. The arithmetic does not depend on the currency.
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