EMI Calculator

How to use this calculator

1. Enter the loan amount you need.
2. Enter the interest rate the lender quoted, as an annual percentage.
3. Enter the tenure in years.

The EMI updates as you type. The figure worth pausing on is equivalent flat rate — explained below, and the single most useful number on this page when you are comparing offers.

How the calculation works

An EMI on a reducing-balance loan uses the annuity formula:

EMI = P x i x (1+i)^n / ((1+i)^n − 1)

• P — the principal
• i — the monthly rate, which is the annual rate divided by 12
• n — the number of monthly instalments

Every EMI is identical, but its split changes: early instalments are mostly interest, later ones mostly principal, because interest is charged on the balance that is still outstanding.

A worked example

A ₹25,00,000 home loan at 8.5% over 20 years.

The monthly rate is 8.5 ÷ 12 = 0.7083%, and there are 240 instalments.

Monthly EMI	₹21,696
Total interest	₹27,06,939
Total payable	₹52,06,939
Equivalent flat rate	5.41%

You repay more than twice what you borrowed. That is normal for a 20-year loan and is the real cost of spreading it that far.

The flat rate trap

This is the part worth understanding properly, because it costs Indian borrowers a great deal of money every year.

Reducing balance charges interest only on what you still owe. As you repay, the interest component shrinks.

Flat rate charges interest on the full original amount for the entire tenure — including on money you repaid years ago.

The difference is enormous, but the number looks smaller, which is the whole point. Our ₹25 lakh loan at 8.5% reducing produces ₹27,06,939 of interest. Spread that across the original principal and the tenure:

flat equivalent = 27,06,939 / (25,00,000 × 20) × 100 = 5.41%

So 8.5% reducing is the same cost as 5.41% flat. Which means:

• A dealer offering “7% flat” is charging you more than a bank at 8.5% reducing, despite the smaller headline.
• A “6% flat” personal loan over 5 years works out to roughly 11% reducing.

As a rough rule, a flat rate is about 1.8 to 1.9 times cheaper-looking than the reducing rate it corresponds to on a long tenure. Whenever a lender quotes a rate, ask which basis it is on. If they will not say plainly, that is itself the answer.

Prepayment is the biggest lever you have

Because interest is charged on the outstanding balance, every rupee paid early removes interest from every remaining month.

On the same ₹25 lakh loan, paying an extra ₹5,000 a month:

Months saved	85 — just over 7 years
Interest saved	₹10,89,361

An extra ₹5,000 a month totals about ₹7.75 lakh of additional payments, and it removes nearly ₹11 lakh of interest. There is no investment with a guaranteed return that competes with that.

Crucially, RBI prohibits prepayment penalties on floating-rate home loans taken by individuals. There is usually nothing to lose by paying early.

Common mistakes to avoid

Negotiating the EMI instead of the rate. Any EMI can be reached by stretching the tenure. Agreeing to “₹22,000 a month” tells you nothing about what the loan costs. Fix the amount and the rate first.

Extending the tenure to make it affordable. Going from 20 to 30 years on this loan cuts the EMI by ₹2,473 — to ₹19,223 — and adds ₹17,13,282 in interest. It is sometimes the right call, but understand what it costs.

Ignoring processing fees and insurance. Most lenders add 0.25% to 1% as a processing fee, and many bundle a loan protection policy into the disbursement. Both are financed, so you pay interest on them for the whole tenure.

Assuming the EMI is fixed. Most Indian home loans are linked to the repo rate and reset quarterly. When rates rise, banks usually keep the EMI and extend the tenure instead — quietly adding years. You can normally ask for the EMI to rise instead, which is cheaper.

When this calculator is not the right tool

For working out how much you can borrow in the first place, use the home loan eligibility calculator — lenders assess that from your income, not from the property price. For a loan with no sales tax or trade-in complications outside India, the general loan calculator is simpler.