EMI Calculator

EMI = [P × r × (1 + r)ⁿ] ÷ [(1 + r)ⁿ − 1], where P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the loan tenure in months. This is the reducing balance method — interest is charged only on the outstanding principal each month, so as you repay, the interest portion of every EMI shrinks and the principal portion grows, even though the EMI itself stays fixed.

Reducing balance vs flat rate:almost all Indian bank loans (home, car, personal) use reducing balance, which is what this calculator models. Some informal or gold-loan style lenders quote a "flat rate" instead, where interest is calculated on the original principal for the entire tenure regardless of repayment — a flat rate of 8% can work out to a reducing-balance-equivalent rate of roughly 14-15%, so always confirm which method a lender is quoting before comparing offers.

Prepayment and part-payment: paying extra toward the principal at any point — a lump sum bonus, for example — reduces the outstanding balance immediately, which lowers all future interest. This calculator shows the standard schedule without prepayments; making even one part-payment early in a long-tenure loan can meaningfully cut total interest since the outstanding balance is highest in the early years.

Also budget for a one-time processing fee (commonly 0.5%-2% of the loan amount for Indian home/personal loans) — it's charged upfront and isn't part of the EMI itself, so it doesn't appear in the numbers above.