Calculators by loan type
The EMI formula, with an example
Banks in India use the reducing-balance formula:
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
- n is the number of monthly instalments
For a loan of ₹10,00,000 at 9% a year for 5 years: r = 9 ÷ 12 ÷ 100 = 0.0075, and n = 60. Putting these into the formula gives an EMI of ₹20,758. Over 60 months you pay₹12,45,501 in total, of which ₹2,45,501 is interest.
How tenure changes your EMI and total interest
A longer loan means a smaller EMI but much more interest overall. Here is a₹30,00,000 loan at 8.5% a year over different tenures:
| Tenure | Monthly EMI | Total interest | Total payment |
|---|---|---|---|
| 10 years | ₹37,196 | ₹14,63,485 | ₹44,63,485 |
| 15 years | ₹29,542 | ₹23,17,594 | ₹53,17,594 |
| 20 years | ₹26,035 | ₹32,48,327 | ₹62,48,327 |
| 25 years | ₹24,157 | ₹42,47,044 | ₹72,47,044 |
Choose the shortest tenure whose EMI you can pay comfortably every month, leaving room for other expenses and savings.
Ways to pay less interest
- Make a bigger down payment so you borrow less.
- Compare lenders. Even 0.5% lower interest saves a lot on a long loan.
- Prepay when you can. Extra payments reduce the balance that interest is charged on. Check for prepayment charges first.
- Keep a good credit score. Lenders usually offer better rates to borrowers with strong repayment histories.
This calculator gives an estimate for planning. Your lender's figures may differ slightly due to rounding, start date, fees or insurance. It is not financial advice.