What is EMI?
EMI (Equated Monthly Installment) is the fixed monthly payment you make to repay a loan over a set period. It includes both the principal (the amount you borrowed) and the interest (the cost of borrowing).
The EMI Formula
EMI is calculated using this formula:
EMI = P × r × (1+r)^n / ((1+r)^n - 1)
- P = Principal loan amount
- r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
- n = Number of monthly installments (tenure in months)
💡 Example: A $10,000 loan at 8% annual interest for 36 months:
r = 8/12/100 = 0.0067
EMI ≈ $313.36/month
Total payment: $11,280.73 | Total interest: $1,280.73
r = 8/12/100 = 0.0067
EMI ≈ $313.36/month
Total payment: $11,280.73 | Total interest: $1,280.73
Factors That Affect Your EMI
- Principal amount: Higher loan amount = higher EMI
- Interest rate: Even 0.5% difference significantly changes total interest paid
- Tenure: Longer tenure = lower EMI but higher total interest paid
- Type of rate: Fixed vs floating rates affect EMI stability over time
How to Use the EMI Calculator
1Open the Loan EMI Calculator.
2Enter the loan amount (principal).
3Enter the annual interest rate (check your loan agreement).
4Enter the loan tenure in months or years.
5See your monthly EMI, total interest, and total repayment amount instantly.
EMI for Different Loan Types
- Home loan: Low rates (6–9%), long tenure (15–30 years) = lower EMI
- Car loan: Medium rates (7–12%), 3–7 years
- Personal loan: Higher rates (10–24%), 1–5 years
- Education loan: Low rates (5–10%), 5–15 years
FAQ
Does paying more than EMI reduce interest?
Yes! Making prepayments reduces the outstanding principal, which directly reduces the total interest you pay. Even occasional partial prepayments can save thousands over a long tenure.
Is EMI the same every month?
For fixed-rate loans, yes — EMI remains constant throughout the tenure. For floating-rate loans, EMI may change when interest rates change.