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Loan EMI calculator (monthly loan payment)

Enter the loan amount, yearly interest rate and term to get the fixed monthly payment, the total interest, and a month-by-month schedule. Add an optional extra payment to see how much sooner you finish and how much interest you save.

How the EMI is calculated

An EMI (equated monthly instalment) is the fixed amount you pay every month on a reducing-balance loan. In the US and UK it is usually just called the monthly loan payment. Each payment covers that month's interest first; the rest pays down the balance. Because the balance falls every month, the interest part shrinks and the principal part grows, even though the payment stays the same.

EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1)

  • P is the amount borrowed.
  • r is the monthly interest rate: the yearly rate ÷ 12 ÷ 100. A 12% yearly rate is 0.01 a month.
  • n is the number of monthly payments (years × 12).

If the rate is 0%, the formula does not apply and the payment is simply P ÷ n.

Worked example

Borrow 100,000 at 12% a year for 12 months. Then r = 0.01 and n = 12, and (1.01)12 ≈ 1.126825.

EMI = 100,000 × 0.01 × 1.126825 ÷ 0.126825 ≈ 8,884.88 a month. Over 12 months you pay 106,618.55 in total, so the interest is 6,618.55.

In month 1 the interest is 1% of 100,000 = 1,000, so 7,884.88 of the payment reduces the balance to 92,115.12. In month 2 the interest is only 921.15, so more of the same payment goes to the balance.

What an extra monthly payment does

Every extra amount you pay goes straight to the balance, so the next month's interest is charged on a smaller amount. The calculator keeps your EMI the same, adds the extra on top, and stops when the balance reaches zero. It then compares this with the normal schedule.

Example: a 1,000,000 home loan at 8% for 25 years has an EMI of about 7,718.16 and total interest of about 1,315,448.66. Paying 5,000 extra each month clears it in 112 months (9 years 4 months) instead of 300, with total interest of about 421,640.83, a saving of roughly 893,808.

Before you overpay, check your loan agreement: some lenders charge a fee for early or partial repayment, or only accept lump sums, and some reduce the EMI instead of the term.

Assumptions and limits

  • Interest is charged monthly on the remaining balance at a fixed rate for the whole term.
  • Fees, insurance, taxes and processing charges are not included. Your lender's figure may differ by a few units because of their rounding and day-count rules.
  • Flat-rate loans (interest charged on the original amount for the whole term) work differently and cost more than the same headline rate on a reducing balance.

FAQ

Is a lower EMI always better?

No. Stretching the same loan over more months lowers the EMI but raises the total interest. Compare the total interest figure, not just the monthly amount.

Why is most of my early payment interest?

Interest is a percentage of what you still owe, and the balance is largest at the start. As it falls, the interest part shrinks. The schedule below the result shows this month by month.

Is EMI the same as the US "monthly loan payment"?

Yes, for a standard fixed-rate amortising loan the maths is the same. EMI is the usual term in India and the Gulf; "monthly payment" or "amortisation" is more common in the US and UK.

This calculator gives estimates for planning only. It is not financial advice; check the exact figures and terms with your lender.