Calculate your monthly loan EMI, total interest and total repayment amount instantly.
Last updated: March 2026
This free online EMI calculator helps you plan your loan repayment for home loans, car loans, personal loans or education loans in India. Follow these simple steps to get your result:
The standard formula used by all Indian banks and NBFCs to compute EMI on a reducing balance basis is:
EMI = P × r × (1 + r)n / ((1 + r)n − 1)
| Symbol | Meaning |
|---|---|
| P | Principal loan amount (e.g., ₹10,00,000) |
| r | Monthly interest rate = Annual rate / 12 / 100 (e.g., 8.5% → 0.007083) |
| n | Total number of monthly instalments = Years × 12 (e.g., 20 years → 240) |
Suppose you take a home loan of ₹10,00,000 at 8.5% per annum for 20 years:
This means you pay nearly the same amount in interest as the original loan itself over a 20-year period. Choosing a shorter tenure or making periodic prepayments can significantly reduce this interest burden.
EMI stands for Equated Monthly Instalment. It is the fixed amount you pay to a bank or financial institution every month until the loan is fully repaid. Each EMI consists of two components: a portion that goes towards the principal repayment and a portion that covers the interest charged on the remaining outstanding balance. In the early years of a loan, a larger share of your EMI goes towards interest, while in later years, the principal component dominates.
EMI is calculated using the reducing balance method with the formula: EMI = P × r × (1+r)n / ((1+r)n − 1), where P is the principal amount, r is the monthly interest rate, and n is the total number of monthly instalments. This is the standard method used by all major Indian banks, housing finance companies and NBFCs.
Yes, most banks allow part-prepayment of loans. When you prepay, the outstanding principal reduces, which means the total interest charged also decreases. You can typically choose to either reduce your EMI amount while keeping the tenure the same, or keep the EMI the same and reduce the tenure. For floating-rate home loans in India, banks cannot charge any prepayment or foreclosure penalty as per RBI guidelines.
Yes, a longer loan tenure results in a lower monthly EMI because the principal is spread across more months. However, this comes at a cost: you end up paying significantly more total interest over the life of the loan. For instance, a ₹50 lakh loan at 9% for 20 years has an EMI of about ₹44,986 with total interest of ₹57.97 lakh, whereas the same loan for 30 years has a lower EMI of ₹40,234 but total interest of ₹94.84 lakh.
In the flat rate method, interest is calculated on the entire original loan amount for the full tenure, ignoring the fact that you have been repaying principal each month. In the reducing balance method (which this calculator uses), interest is calculated only on the outstanding principal balance, which decreases every month. The reducing balance method is fairer to the borrower and is mandated by RBI for most consumer loans in India. A flat rate of 8% roughly translates to about 14-15% on a reducing balance basis.
Yes, several tax deductions are available under the Income Tax Act. For home loans, the principal component qualifies for deduction under Section 80C (up to ₹1.5 lakh per year), while the interest component qualifies under Section 24(b) (up to ₹2 lakh per year for self-occupied property, no limit for let-out property). First-time homebuyers may claim an additional deduction of ₹1.5 lakh under Section 80EEA (subject to conditions). For education loans, the entire interest paid is deductible under Section 80E with no upper limit.