EMI calculator

How it is calculated

What is EMI?

An EMI (equated monthly instalment) is the fixed amount you pay the bank every month until the loan is repaid. Each EMI covers the interest on the outstanding balance plus a part of the principal. Because the balance falls every month, the interest portion shrinks and the principal portion grows – which is exactly what the amortization schedule shows.

EMI formula and how to calculate EMI

EMI formula: E = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where P is the loan amount, r the monthly interest rate (annual rate ÷ 12 ÷ 100) and n the tenure in months. Banks such as ICICI Bank publish the same formula for their EMI calculators. In Excel or Google Sheets use =PMT(8.5%/12, 240, -1000000).

Worked example: a loan of ₹10,00,000 (10 lakh) at 8.5% for 20 years gives r = 0.085 ÷ 12 = 0.0070833 and n = 240. The EMI is ₹8,678 per month. In the first month ₹7,083 of it is interest (₹10,00,000 × 0.0070833) and ₹1,595 repays principal, leaving ₹9,98,405. Over 240 months you pay about ₹20.83 lakh in total, of which about ₹10.83 lakh is interest.

Quick check: at 8.5% for 20 years the EMI is about ₹868 per ₹1 lakh borrowed – multiply by the number of lakhs for a first estimate.

Home loan, car loan, bike loan and personal loan EMI

The formula is the same for every EMI-based loan; only the typical amount, rate and tenure differ:

How rate and tenure change your EMI

On a ₹25 lakh home loan over 20 years, every half percentage point matters: the EMI is ₹20,911 at 8%, ₹21,696 at 8.5% and ₹22,493 at 9%. A longer tenure lowers the EMI but raises the total interest – a ₹50 lakh loan at 8.5% costs ₹43,391 a month and about ₹54.14 lakh interest over 20 years, or ₹38,446 a month and about ₹88.40 lakh over 30 years.

Flat rate vs reducing balance

This calculator uses the reducing balance method: interest is charged only on the amount still outstanding. With a flat rate, interest is charged on the full loan for the whole tenure: EMI = (P + P × flat rate × years) ÷ months. ₹5 lakh at 11% flat for 3 years gives ₹18,472 a month instead of ₹16,369 at 11% reducing – so compare flat-rate offers only after converting them.

Credit card EMI and no-cost EMI

Converting a purchase into EMIs on a credit card follows the same reducing-balance formula. ₹60,000 at 15% p.a. costs ₹10,442 a month over 6 months (≈ ₹2,652 interest) or ₹5,416 a month over 12 months (≈ ₹4,986 interest) – enter the tenure in months. With a no-cost EMI offer the interest is usually offset by a discount on the price, so the instalments add up to roughly the price you would pay upfront. Processing fees and GST come on top and are not included here – check the card issuer's terms.

Assumptions

This loan EMI calculator assumes a fixed interest rate for the whole tenure, monthly instalments starting one month after disbursement and interest rounded to the paisa each month; the last instalment settles any rounding difference. Processing fees, insurance and GST are not included. For floating-rate loans the EMI or the tenure changes when the rate is reset; under RBI rules your lender must tell you about the reset and let you choose between a higher EMI and a longer tenure.

Frequently asked questions

Sources and legal basis

• RBI/2023-24/55, DOR.MCS.REC.32/01.01.003/2023-24: Reserve Bank of India – Reset of Floating Interest Rate on EMI based Personal Loans (EMI, tenor, statements)
• ICICI Bank – Home loan EMI calculator: EMI = [P × R × (1+R)^N] / [(1+R)^N − 1]

As of: 27 September 2026 · Editorial policy