EMI Calculator
How EMI is calculated
An EMI (Equated Monthly Instalment) is the fixed amount you repay each month on a loan — home, car, personal or education. Each EMI has two parts: interest on the outstanding balance and principal repayment. Early EMIs are mostly interest; later ones are mostly principal. The calculator above gives your EMI, total interest and total payment.
The formula
A worked example
A home loan of ₹30,00,000 at 9% for 20 years (240 months): EMI is about ₹26,992; total paid is about ₹64.8 lakh, of which roughly ₹34.8 lakh is interest.
What changes your EMI
| If this goes up | EMI | Total interest |
|---|---|---|
| Loan amount | Up | Up |
| Interest rate | Up | Up |
| Tenure (longer) | Down | Up |
Fixed vs floating interest rate
A fixed-rate loan keeps the same EMI for the whole term, which is predictable but usually starts higher. A floating-rate loan moves with the lender's benchmark (the repo rate or an external benchmark), so your EMI — or more often your tenure — changes when rates change. Most home loans in India are floating. When rates fall, ask your lender to reduce the tenure rather than the EMI: you finish faster and pay far less total interest. When rates rise, the bank typically extends the tenure quietly, so check your amortisation schedule once a year.
How prepayment really works
Because interest is charged on the outstanding balance, money you put in early removes interest on every remaining month. On a ₹30 lakh, 20-year loan at 9%, a single ₹1 lakh prepayment in year 2 can save well over ₹3 lakh in interest and shave months off the loan — far more than the ₹1 lakh itself. Two habits compound this: (1) make one extra EMI a year (a "13th EMI"), and (2) put any bonus or windfall straight onto the principal. Confirm your lender charges no prepayment penalty — floating-rate home loans to individuals cannot be charged one under RBI rules.
Tax benefits on a home loan
Under the old tax regime, a home loan for a self-occupied house gives a deduction of up to ₹2 lakh on interest under Section 24(b) and up to ₹1.5 lakh on principal under Section 80C each year. These are not available under the new regime, so factor your regime choice into the real cost of the loan. Education and car loans have their own rules — education-loan interest is deductible under Section 80E with no upper limit for up to 8 years.
How much loan can you afford?
Lenders look at your FOIR (fixed-obligation-to-income ratio) — all your EMIs as a share of net income. Keeping total EMIs under about 40% of take-home pay keeps you eligible for future credit and gives breathing room if rates rise or income dips. Before committing, run the EMI at a rate 1–2% higher than today's to stress-test whether you could still pay comfortably.
Frequently asked questions
How is EMI calculated?
EMI = P r (1+r)^n / ((1+r)^n − 1), where r is the monthly rate and n the number of months.
Why is early EMI mostly interest?
Interest is charged on the outstanding balance, highest at the start, so early instalments are interest-heavy.
Does a longer tenure reduce my EMI?
Yes, but it increases total interest over the life of the loan.
How does prepayment help?
It reduces the principal, so all future interest is on a smaller balance, saving money.
What EMI is affordable?
A common rule is to keep total EMIs under about 40% of monthly income.
Source: standard reducing-balance EMI mathematics. Actual loan terms depend on your lender. ComplyKraft is independent; this is not financial advice.