top of page

Calculate the EMI of a loan

This calculator helps you calculate the value of the equated monthly instalments (EMI) of a loan for a given amount, interest rate and duration. For the given parameters (base case), it shows the EMI along with the interest paid and loan duration. Then using that EMI as a reference, it shows the consequences of paying 5% and 10% less or more than the base case EMI. Note: The EMI varies depending on whether the EMI is paid at the start or the end of the period. This calculator assumes it is at the end of the period.

If you have the interest rate for a different frequency and not the monthly or annual interest rate, use our interest rate converter to calculate it

How to use this calculator

  1. Enter the principal amount, i.e. the value of the loan you have received

  2. Enter the monthly or annual interest rate in %. Use the interest rate converter to determine the monthly interest rate (yearly) if you have the interest rate in another frequency, e.g. half-yearly or quarterly

  3. Enter the loan duration

What are the basic loan related terms I need to know?

Duration: The duration of a loan is the length of time for which a loan is held. The duration can be calculated mathematically for a given interest rate, amount and EMI.

EMI: An EMI, or equated monthly instalment, refers to a constant monthly payment made to a lender. This term is used when a loan is paid back in instalments over a period of time.

Principal amount: The EMI consists of two parts - the interest and principal amount. The principal amount is the amount of an EMI in a given period that goes towards repaying the principal of a loan in the period. Over time, the principal amount of the EMI increases, while the principal amount decreases.

Interest amount: The interest amount is the amount of an EMI in a given period that goes towards repaying the interest due on a loan in the period. Over time, the interest amount of the EMI decreases, while the principal amount increases.

Interest rate: Interest is the amount of extra money you have to pay back on top of the amount you borrowed. It's like a fee for borrowing money. The interest rate is usually expressed as a percentage of the original amount borrowed, and it determines how much you'll have to repay over time.

​

Which factors influence the total amount due on a loan?

The total amount due for a loan is influenced by:

​

  1. Loan amount or principal: If the principal increases, the EMI would increase, assuming the duration and interest rate does not change.

  2. Loan duration: If the duration increases, the EMI would decrease, assuming the duration and interest rate does not change. However, since the EMI decreases with an unchanging interest rate and principal, the total interest paid to the lender will increase, effectively increasing the total amount repaid.  

  3. Interest rate: If the interest rate increases, the EMI will increase for an unchanging principal and loan duration. In this case too, the total interest paid to the lender will increase.

​

What are the formulas I need to know?

The formula to compute the EMI of a loan is given above. By providing relevant inputs: principal amount (P), interest rate (r) or loan duration (n), we can solve the equation to calculate the EMI of a loan. This formula can be used to compute the EMI for home loans, mortgages, car loans, personal loans etc.

​

What would the EMI be on a loan of ₹50,00,000?

If ₹50,00,000 is borrowed for a period of 30 years at a rate of 10%, then the EMI would be ₹43,878.58 for 360 months. The total principal amount to be repaid would be ₹50,00,000 and the total interest amount due on this loan would be ₹1,07,96,288.8. The principal and interest amounts per month would keep changing across the entire loan repayment period, e.g. in the first month the principal and interest amount would be ₹2,211.91 and ₹41,666.66 respectively; in the 240th month, i.e. 20 years later) these would be ₹16,075.09 and ₹27,803.48 respectively. To compute the principal and interest amounts across the loan repayment duration, use this calculator.

​

What does this loan EMI calculator do?

Every type of loans, e.g. home loan, car loan, education loan, personal loan, medical loan etc need to be repaid. Usually, the repayment takes place in equated monthly instalments or EMIs. The EMI or the amount that is repaid each month is a constant amount spread across a fixed amount of time. Since loans usually are subject ot compounding interest, the calculation of how much money needs to be repaid each month is not straightforward. This calculator calculates the EMI on a loan for a given principal amount, interest rate and duration.

​

What is the impact of changing the EMI on a loan?

The EMI increases as the loan amount increases, the duration reduces, or the interest rate increases. Let us consider a loan and change the variables one at a time to see how the EMI can change.

​

Note: The choice of the EMI depends on the ability to service higher EMIs, tax benefits depending on the taxation laws of the country of residence, and other financial or non-financial objectives.

​

Case I: Variable duration with an interest rate of 8% and principal of ₹50,00,000

  1. 200 months

    • EMI: ₹45,337.05

    • Interest paid: ₹40,67,410

  2. 240 months​

    • EMI: ₹41,822.00​

    • Interest paid: ₹50,37,280

  3. 300 months

    • EMI = ₹38,590.81

    • Interest paid: ₹65,77,243

  4. 360 months

    • EMI = ₹36,688.23

    • Interest paid: ₹82,07,762.8

​

Takeaway: Ceterus paribus, as the duration increases, the EMI decreases, but the interest paid on the loan increases, i.e. although the EMI is less, the loan is more expensive in the long run.

​

Case II: Variable interest rate with a duration of 240 months and principal of ₹50,00,000

  1. Interest rate: 6%

    • EMI: ₹35,821.55

    • Interest paid: ₹35,97,172

  2. Interest rate: 8%

    • EMI: ₹41,822

    • Interest paid: ₹50,37,280

  3. Interest rate: 10%

    • EMI: ₹48,251.08

    • Interest paid: ₹65,80,259.2

​

Takeaway: Ceterus paribus, as the interest rate increases, the EMI intuitively also increases and with that so does the interest paid on the loan.

​

Case III: Variable principal with a duration of 240 months and interest rate of 8%

  1. Principal: ₹20,00,000

    • EMI: ₹16,728.8

    • Interest paid: ₹20,14,912.33

  2. Principal: ₹30,00,000

    • EMI: ₹25,093.2

    • Interest paid: ₹30,22,368.5

  3. Principal: ₹40,00,000

    • EMI: ₹33,457.6

    • Interest paid: ₹40,29,824.66

​

Takeaway: Ceterus paribus, as the principal rate increases, the EMI intuitively also increases and with that so does the interest paid on the loan.

​

What should I understand from the examples in the three situations described above?

Some of the main take-aways are:

  1. Changing one or more inputs can have an impact on the overall cost for a person

  2. Tax benefits, if any, can have an impact on the cost of the loan as these represent opportunity costs

  3. A lower interest rate does not always minimise the total interest paid on a loan as the effects of the duration and the principal amount will influence the total interest paid as well

  4. Paying off a loan faster reduces the total interest paid but other dimensions such as individual policy clauses, the ability to service a higher EMI, tax implications, financial and non-financial goals etc may influence the decision to pay off a loan faster

​

Why is this calculator useful?

This free online EMI calculator is useful as it can help a person quickly calculate the EMI on different types of loans without worrying about complex formulas and calculations. This understanding can help in understanding the impact of different types of loans and possibly in making better loan decisions.

​

How do I use this EMI calculator?

Instructions to use this EMI calculator are provided above.

bottom of page