How is EMI calculated?

EMI is calculated using the formula EMI = P × r × (1+r)^n / ((1+r)^n − 1), where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly installments.

What is a good EMI to income ratio?

A common rule of thumb in India is to keep your total monthly EMIs under 40% of your monthly take-home income, so you retain enough for living expenses and savings.

Does prepaying a loan reduce the EMI or the tenure?

Most Indian lenders keep the EMI the same and reduce the tenure when you prepay, which saves the most interest. You can usually request to lower the EMI instead, but that saves less overall.

Loan Tools

EMI Calculator

Work out your monthly EMI for home, car, or personal loans. See total interest, total payment, and a year-by-year breakdown of how much goes toward principal vs. interest.

Loan Details

Adjust sliders or type values directly. Results update instantly.

Loan Amount

₹25.00 L

₹1 L₹5 Cr

Interest Rate

8.50% per annum

1%20%

Loan Tenure

20 years (240 months)

1 Yr30 Yr

Monthly EMI

₹21,696

for 240 months

Total Interest

₹27,06,939

Paid over loan tenure

Total Payment

₹52,06,939

Principal + Interest

Principal vs Interest

Of the total ₹52.07 L you'll pay, here's the split.

Total₹52.1 L

Principal

48.0%

Interest

52.0%

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Year-wise Breakdown

How much of each year's payment goes to principal vs interest.

Year	Principal	Interest	Total Paid	Balance
1	₹49,756	₹2,10,591	₹2,60,347	₹24,50,244
2	₹54,154	₹2,06,193	₹2,60,347	₹23,96,091
3	₹58,940	₹2,01,407	₹2,60,347	₹23,37,150
4	₹64,150	₹1,96,197	₹2,60,347	₹22,73,000
5	₹69,820	₹1,90,527	₹2,60,347	₹22,03,180
6	₹75,992	₹1,84,355	₹2,60,347	₹21,27,188
7	₹82,709	₹1,77,638	₹2,60,347	₹20,44,479
8	₹90,020	₹1,70,327	₹2,60,347	₹19,54,459
9	₹97,977	₹1,62,370	₹2,60,347	₹18,56,482
10	₹1,06,637	₹1,53,710	₹2,60,347	₹17,49,846
11	₹1,16,063	₹1,44,284	₹2,60,347	₹16,33,783
12	₹1,26,321	₹1,34,026	₹2,60,347	₹15,07,462
13	₹1,37,487	₹1,22,860	₹2,60,347	₹13,69,974
14	₹1,49,640	₹1,10,707	₹2,60,347	₹12,20,335
15	₹1,62,866	₹97,480	₹2,60,347	₹10,57,468
16	₹1,77,262	₹83,085	₹2,60,347	₹8,80,206
17	₹1,92,931	₹67,416	₹2,60,347	₹6,87,275
18	₹2,09,984	₹50,363	₹2,60,347	₹4,77,291
19	₹2,28,545	₹31,802	₹2,60,347	₹2,48,746
20	₹2,48,746	₹11,601	₹2,60,347	₹0

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How EMI is calculated

EMI stands for Equated Monthly Installment — the fixed amount you pay your bank every month until your loan is fully repaid. Each EMI has two parts: a portion that reduces your outstanding principal and a portion that pays interest on the remaining balance. In the early years of a long-tenure loan, most of your EMI goes toward interest. As your balance shrinks, the principal share grows.

The standard EMI formula used by Indian banks is 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 monthly installments.

Use this calculator before taking a home loan, car loan, or personal loan to check affordability. A useful rule of thumb is to keep your total EMIs under 40% of your monthly take-home income. You can also experiment with prepayment: paying even one extra EMI per year can shave several years off a 20-year home loan and save lakhs in interest.