Finance & Calculators 2 min read
How to Calculate EMI for a Home, Car or Personal Loan (Formula + Example)
Understand the EMI formula, see a worked example, and learn how tenure and interest rate change what you pay — with a free EMI calculator.
EMI (Equated Monthly Instalment) is the fixed amount you pay your lender every month until the loan is cleared. Part of each EMI repays the principal and part pays interest — early on, mostly interest.
The EMI formula
- EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
- P = loan amount, r = monthly interest rate (annual rate ÷ 12 ÷ 100), n = number of months
Worked example
A ₹10,00,000 loan at 9% a year for 10 years (120 months): r = 0.0075, n = 120. The EMI works out to about ₹12,668 a month. Over 10 years you pay roughly ₹15.2 lakh in total, so about ₹5.2 lakh is interest.
EMI Calculator
Calculate your EMI, total interest and payment schedule.
How tenure and rate change your cost
- Longer tenure lowers the EMI but raises total interest paid.
- Shorter tenure raises the EMI but you pay far less interest overall.
- Even a 0.5% lower rate can save a large amount on a long home loan.
Ways to reduce what you pay
- Make a bigger down payment to reduce the loan amount.
- Prepay part of the principal when you can.
- Compare lenders and check processing fees.
Frequently asked questions
How is EMI calculated?
EMI = P × r × (1+r)^n ÷ ((1+r)^n − 1), where P is the principal, r the monthly rate and n the number of months.
Does a longer tenure save money?
It lowers your monthly EMI but increases the total interest you pay over the loan.
Is this financial advice?
No. The calculator gives estimates; confirm exact figures with your lender.
