EMI Calculator
Calculate your loan EMI or plan your budget with reverse calculation
Loan Details
Breakdown
Loan Summary
Monthly EMI
₹12,668
Principal
₹1,000,000
Total Interest
₹520,109
Total Amount
₹1,520,109
Interest Rate
9% p.a.
📈 Smart Strategy: SIP Investment
💡 Smart Tip: Prepayment Benefits
What is EMI?
EMI (Equated Monthly Installment) is a fixed payment amount made by a borrower to a lender at a specified date each month. EMIs are used to pay off both interest and principal each month so that over a specified number of years, the loan is paid off in full.
Key Features
• Fixed Monthly Payment: Same amount every month for easy budgeting
• Interest + Principal: Each EMI covers both interest and principal repayment
• Reducing Balance: Interest calculated on outstanding principal (most common)
• Flexible Tenure: Choose loan duration from 1 to 30 years
• Prepayment Option: Pay extra to reduce tenure or interest burden
EMI Calculation Formula
Reducing Balance Method: EMI = [P × R × (1+R)^N] / [(1+R)^N-1]
Where P = Principal, R = Monthly interest rate, N = Number of months
Fixed Rate Method: Total Interest = (P × R × T) / 100, then divide total by months
Most banks use reducing balance method which is more borrower-friendly
Smart Strategies
• Prepayment: Pay one extra EMI yearly to save lakhs in interest and reduce tenure
• SIP Investment: Start a SIP alongside your loan to build wealth while repaying
• Compare Rates: Even 0.5% lower rate can save significant amount over loan tenure
• Shorter Tenure: Higher EMI but much lower total interest paid
Frequently Asked Questions
What happens to my EMI if the interest rate changes?
If you have a fluctuating/floating interest rate and it increases, your bank typically increases your loan tenure while keeping the EMI the same. However, you can request them to increase the EMI instead to keep the tenure unchanged.
Does loan tenure affect my EMI?
Yes, a longer tenure decreases your monthly EMI but significantly increases the total interest paid. A shorter tenure increases the EMI but saves you money on the overall interest.