EMI Calculator

EMI uses the reducing-balance annuity formula: EMI = P × r × (1 + r)n / [(1 + r)n − 1] where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of months.

Example: ₹25,00,000 at 8.5% per annum for 20 years gives r = 0.085 / 12 ≈ 0.00708 and n = 240. Plug in and you get an EMI of roughly ₹21,696 / month — about ₹52,07,000 paid in total, of which ₹27,07,000 is interest.

A fixed rate stays the same for the entire loan tenure (or a long fixed period) — your EMI never changes, which makes budgeting predictable but offers no relief if rates fall. A floating rate is benchmarked to an external rate (such as the repo rate) and resets periodically: when the benchmark moves up your EMI or tenure rises, and when it moves down it falls. Floating rates tend to be a little cheaper on average over a long tenure, but require tolerance for monthly cash-flow variability.

Yes — and substantially. Every rupee of extra principal you pay reduces the outstanding balance, which reduces every future interest charge on that balance. You generally have two prepayment options:

• Reduce tenure — keep the EMI the same, finish the loan earlier. This saves the most interest because you cut off the most expensive late-stage interest months.
• Reduce EMI — keep the original tenure, shrink the monthly cash outflow. This saves less total interest but frees up cash flow today.

On a long-tenure loan, a single annual prepayment equal to one EMI can shave several years off the schedule.

Reducing-balance EMI (what this calculator uses, and what every regulated bank uses for home / car / personal loans) charges interest only on the outstanding principal, so the interest cost falls as the loan amortizes. Flat-rate EMI charges interest on the original principal for the full tenure, regardless of how much you have already paid back.

A 12% flat rate on a 5-year loan is roughly equivalent to a 21–22% reducing-balance rate — so always compare loans on a reducing-balance / APR basis, not on the headline flat number you sometimes see in auto-dealer or no-cost EMI marketing.