EMI Calculator

How is EMI calculated?

EMI — Equated Monthly Instalment — is the fixed amount you pay a lender every month until your loan is cleared. Each EMI covers both interest (the cost of borrowing) and principal (the amount you originally borrowed). In the early years, most of the EMI is interest; in the later years, most of it is principal.

The standard formula: EMI = P × r × (1+r)^n / ((1+r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate divided by 12 × 100), and n is the tenure in months.

Tips to reduce your EMI

• Negotiate the interest rate. Every 0.5% reduction on a ₹50 lakh home loan saves roughly ₹1,700 a month.
• Extend the tenure. A longer tenure lowers the EMI but raises total interest — useful if monthly cash flow is tight but not ideal long-term.
• Prepay when you can. A ₹1 lakh prepayment in year 2 of a 20-year home loan saves around ₹2 lakh in interest.
• Choose floating over fixedwhen rates are trending down, fixed when they're trending up.
• Check your credit score first. A 750+ CIBIL typically unlocks 50–100 bps lower rates. Here's how to build your score.

Should I prepay or keep the EMI?

Prepay whenever your surplus cash can earn less than the loan's interest rate in a comparable risk-profile investment. On a 9% home loan, pre-payment beats a 7% FD. On a 9% home loan versus an equity SIP expecting 12% long-term, the SIP usually wins — but equity carries higher risk. Most Indian households benefit from a split: part prepayment, part long-term investing.

Disclaimer: Calculations are indicative. Your actual EMI may vary based on processing fees, prepayment charges, and floating-rate revisions. Always confirm with the lender before committing.