EMI Calculator
Every standard reducing-balance loan (home, personal, vehicle) uses the same EMI formula, regardless of lender. This computes the fixed monthly instalment for a given principal, interest rate and tenure.
EMI = P × r × (1+r)n / ((1+r)n - 1), where P is the loan amount, r is the monthly interest rate, and n is the number of monthly instalments.
How to use this calculator
Enter the loan amount, the annual interest rate your lender quotes, and the loan tenure in years. The calculator applies the standard reducing-balance formula and shows your fixed monthly instalment, total interest paid, and total repayment over the full tenure.
What this doesn't account for
This assumes a fixed interest rate for the entire tenure, no prepayment, and no processing fees or insurance premiums, which most real loans add on top of principal and interest.
Frequently asked questions
What is EMI?
Equated Monthly Instalment: a fixed amount paid every month toward a loan, covering both interest and principal, until the loan is fully repaid.
Does the EMI amount stay the same for the whole loan?
Under a fixed-rate reducing-balance loan, which this calculator assumes, yes. A floating-rate loan's EMI or tenure can change if the lender's rate changes.
Why does most of my early EMI go toward interest?
Interest is charged on the outstanding balance, which is highest at the start, so early instalments are interest-heavy. The principal share grows as the balance shrinks.
Does this include processing fees or insurance?
No, only principal and interest at the stated rate. Lenders often add a one-time processing fee and may require insurance, which this calculator doesn't include.
What happens if I prepay part of the loan?
This calculator assumes no prepayment. Prepaying reduces the outstanding principal, which either shortens the tenure or lowers future EMIs depending on what your lender allows.
Can I use this for a floating-rate loan?
You can approximate one snapshot in time, but a floating rate can change, which would change the real EMI or tenure versus this fixed-rate estimate.
Is a longer tenure always cheaper per month?
Yes, but at the cost of paying more total interest over the life of the loan. Compare the total-interest figure alongside the monthly EMI, not the EMI alone.
Does this work the same for a home loan, personal loan and vehicle loan?
Yes, the reducing-balance EMI formula is identical across loan types; only the typical interest rate and tenure ranges differ.
What's the difference between flat rate and reducing balance interest?
This calculator assumes reducing balance, the standard for most loans in India. A flat-rate loan charges interest on the full original principal for the whole tenure, which works out to a materially higher effective rate for the same stated percentage.
This is a generic financial calculation, not investment, loan or tax advice specific to you. BrokerLens is not a SEBI-registered investment adviser.