EMI Calculator for Home, Car & Personal Loans
Himanshu Grewal
Founder • Calculator Tool Developer
Builds fast, accurate, and user-friendly online calculators for finance, education, and everyday use.
View full profile →Enter loan amount, interest rate and tenure to get your EMI, total interest and repayment schedule, with prepayment and flat-rate options.
Calculate Your Loan EMI
Interest method
Add down payment (optional)
Add prepayment (optional)
Your EMI stays the same and the loan ends earlier. This saves the most interest.
Principal 0%
Interest 0%
Repayment schedule
| Year | Principal | Interest | Balance |
|---|
Quick answer
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the monthly interest rate and n is the number of months. Example: a ₹30 lakh home loan at 8.5% a year for 20 years has an EMI of ₹26,035, and you pay ₹32.48 lakh in total interest.
EMI Formula and How to Calculate EMI
EMI (Equated Monthly Instalment) is the fixed amount you pay every month until the loan is repaid. Banks in India use the reducing balance method, where interest is charged only on the amount you still owe.
EMI = P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1]
P = loan amount · r = yearly rate ÷ 12 ÷ 100 · n = months
Step by step
- 1
Find the monthly rate: divide the yearly interest rate by 12 and then by 100. For 8.5% a year, r = 8.5 ÷ 12 ÷ 100 = 0.007083.
- 2
Count the months: convert the loan tenure to months. For 20 years, n = 20 × 12 = 240.
- 3
Apply the EMI formula: eMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount.
For P = ₹30,00,000, r = 0.007083 and n = 240, the EMI comes to ₹26,035.
Where your EMI goes
Each EMI has two parts: interest on the balance and repayment of principal. In the first month of the ₹30 lakh loan above, ₹21,250 is interest and only ₹4,785 reduces your loan. The interest part shrinks every month as the balance falls. Switch the schedule to "Monthly" in the calculator to see this month by month.
EMI for Home, Car and Personal Loans
The formula is the same for every loan. What changes is the amount, the rate and the tenure. These examples use typical figures — your bank's rate may be different.
| Loan | Amount, rate, tenure | EMI | Total interest |
|---|---|---|---|
| Home loan | ₹30 lakh, 8.5%, 20 years | ₹26,035 | ₹32,48,327 |
| Car loan | ₹8 lakh, 9%, 5 years | ₹16,607 | ₹1,96,401 |
| Personal loan | ₹5 lakh, 12%, 3 years | ₹16,607 | ₹97,858 |
| Short loan | ₹10 lakh, 10%, 1 year | ₹87,916 | ₹54,991 |
Notice the home loan: over 20 years you pay more in interest (₹32.5 lakh) than you borrowed (₹30 lakh). A shorter tenure raises the EMI but cuts the total interest a lot.
Flat Rate vs Reducing Balance EMI
Some car dealers, NBFCs and consumer-loan offers quote a flat rate. It looks cheaper but is not, because interest is charged on the full loan amount for the whole tenure, even after you have repaid part of it.
| ₹5 lakh for 3 years | 10% flat | 10% reducing |
|---|---|---|
| Interest formula | P × rate × years | on balance each month |
| EMI | ₹18,056 | ₹16,134 |
| Total interest | ₹1,50,000 | ₹80,809 |
| Real (reducing) rate | ≈ 17.9% | 10% |
💡 Expert tip
If a lender quotes a flat rate, choose Flat rate in the calculator. It shows the matching reducing-balance rate, so you can compare the offer with a bank loan fairly. Also ask for the Annual Percentage Rate (APR) in the Key Fact Statement, which includes fees.
EMI with Prepayment: How Much You Save
A prepayment is an extra payment towards the principal. Because future interest is charged on a smaller balance, even one prepayment saves a lot. Example for a ₹30 lakh loan at 8.5% for 20 years:
| Plan | Loan ends after | Total interest | Interest saved |
|---|---|---|---|
| No prepayment | 240 months | ₹32,48,327 | — |
| ₹2 lakh once, after EMI 12 | 206 months | ₹25,60,812 | ₹6,87,516 |
| ₹1 lakh every year, from EMI 12 | 141 months | ₹17,63,834 | ₹14,84,494 |
Reduce EMI or reduce tenure?
After a prepayment, banks usually let you either keep the EMI and finish earlier, or keep the end date and lower the EMI. Reducing the tenure saves more interest. Choose a lower EMI only if your monthly budget is tight.
Prepayment charges
For floating-rate loans taken by individuals for personal use, such as most home loans, lenders cannot charge a prepayment penalty. The RBI's 2025 directions confirm this for loans sanctioned or renewed from 1 January 2026. Fixed-rate loans and some business loans can still have charges, so check your loan agreement.
EMI with Down Payment
You borrow only what is left after your down payment. Open "Add down payment" in the calculator, enter the price and the amount you will pay upfront, and the loan amount is filled in for you.
| ₹10 lakh car, 9%, 5 years | Loan amount | EMI |
|---|---|---|
| No down payment | ₹10,00,000 | ₹20,758 |
| ₹2 lakh down (20%) | ₹8,00,000 | ₹16,607 |
| ₹3 lakh down (30%) | ₹7,00,000 | ₹14,531 |
For home loans, banks usually lend only part of the property value, so you will need to arrange the rest as a down payment. Check the exact limit with your bank.
EMI in Months and Per-Month Interest Rate
Short loans, gold loans and app loans often quote tenure in months and interest "per month". Set the tenure unit to Months and the rate to % per month to match the offer.
- • 1% per month = 12% per year (the calculator converts it for you).
- • ₹1,00,000 for 12 months at 1% per month gives an EMI of ₹8,885.
- • A rate of 2% or 3% per month means 24% to 36% a year, which is very costly.
How to Calculate EMI in Excel
Excel and Google Sheets have built-in loan functions. Put the loan amount in B1, the yearly rate in B2 and the months in B3:
| You want | Formula |
|---|---|
| Monthly EMI | =PMT(B2/12, B3, -B1) |
| Interest in month 1 | =IPMT(B2/12, 1, B3, -B1) |
| Principal in month 1 | =PPMT(B2/12, 1, B3, -B1) |
| Total interest | =PMT(B2/12, B3, -B1)*B3-B1 |
Quick check: =PMT(8.5%/12, 240, -3000000) returns ₹26,035, the same as the calculator. The minus sign before the loan amount makes the answer positive.
When Your EMI Can Change
On a fixed-rate loan, the EMI stays the same. On a floating-rate loan, it can change when the bank's benchmark rate moves.
When the rate is reset, the RBI requires lenders to give you a choice: a higher EMI, a longer tenure, or a mix of both. You can also prepay part or all of the loan at any time.
💡 Expert tip
When rates go up, banks often extend the tenure quietly to keep your EMI the same. That can add years of interest. Check your loan statement after every rate change, and if you can afford it, choose a higher EMI instead.
Common Mistakes
Comparing only the EMI
A lower EMI over a longer tenure usually means much more total interest. Compare the total payment too.
Mixing flat and reducing rates
A "10% flat" offer is not the same as a 10% bank loan. Convert it first.
Forgetting fees
Processing fees, insurance and GST on fees are not part of the EMI but add to the cost of the loan.
Borrowing up to the limit
Keep all your EMIs well within your monthly income so you can still save and handle emergencies.
Why I Built This Calculator
Himanshu Grewal, Founder
Most bank EMI calculators show only the monthly EMI for their own loan. They do not show what a flat-rate offer really costs, or how much a prepayment would save.
I built this one to answer the questions people actually ask before signing: what will I pay in total, is this flat-rate offer fair, and how much do I save if I prepay? Nothing you enter is sent to a server or stored.
If a result ever looks wrong, please let me know so I can check and fix it.
How This Calculator Was Tested
Before publishing, we checked these cases against Excel's PMT function and hand calculations:
- ₹30 lakh, 8.5%, 20 years – EMI ₹26,035, same as =PMT in Excel.
- Schedule – principal paid adds up to the loan amount and the last balance is ₹0.
- 0% interest – EMI is simply the loan divided by the months.
- Flat rate – ₹5 lakh at 10% flat for 3 years gives ₹18,056 and a real rate of about 17.9%.
- Prepayment – ₹2 lakh after EMI 12 ends the loan in 206 months.
- Per-month rate – 1% per month gives the same EMI as 12% per year.
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Frequently Asked Questions
How is EMI calculated?
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1). P is the loan amount, r is the monthly interest rate (yearly rate ÷ 12 ÷ 100) and n is the number of months. For ₹30 lakh at 8.5% for 20 years, the EMI is ₹26,035.
What is the EMI for a ₹10 lakh loan?
It depends on the rate and tenure. At 10% a year, the EMI is ₹87,916 for 1 year, ₹21,247 for 5 years and ₹13,215 for 10 years. Enter your own rate and tenure in the calculator above.
What is the difference between flat rate and reducing balance EMI?
A flat rate charges interest on the full loan amount for the whole tenure. A reducing balance rate charges interest only on what you still owe. A 10% flat rate costs about the same as a 17.9% reducing rate on a 3-year loan, so always compare reducing rates.
How do I calculate EMI if the interest rate is per month?
Choose "% per month" next to the interest rate. A rate of 1% per month equals 12% per year. On ₹1,00,000 for 12 months at 1% per month, the EMI is ₹8,885.
How do I calculate EMI in Excel?
Use =PMT(rate/12, months, -loan). For ₹30 lakh at 8.5% for 20 years, type =PMT(8.5%/12, 240, -3000000) to get ₹26,035.
Does prepayment reduce EMI or tenure?
You can usually choose either. Keeping the EMI the same and reducing the tenure saves more interest. In our example, a one-time prepayment of ₹2 lakh after 12 months on a ₹30 lakh, 20-year loan at 8.5% cuts 34 months and saves about ₹6.88 lakh in interest.
Are there prepayment charges on home loans?
For floating-rate loans taken by individuals for personal use, such as most home loans, banks cannot charge a prepayment penalty. Fixed-rate and business loans can have charges, so check your loan agreement.
How do I calculate car loan EMI with a down payment?
Subtract the down payment from the on-road price to get the loan amount, then calculate the EMI. For a ₹10 lakh car with ₹2 lakh down, the loan is ₹8 lakh, and at 9% for 5 years the EMI is ₹16,607.
Why does most of my early EMI go towards interest?
Interest is charged on the balance you still owe, which is highest at the start. On a ₹30 lakh loan at 8.5%, the first EMI of ₹26,035 has ₹21,250 interest and only ₹4,785 principal. The share of principal grows every month.
Can my EMI change during the loan?
Yes, on a floating-rate loan. When the rate changes, the bank can raise your EMI, extend your tenure, or both. RBI rules require lenders to tell you and give you a choice between these options.
Cite this page:
Himanshu Grewal, "EMI Calculator", Free AI Calculator, https://freeaicalculator.com/finance/emi-calculator/