EMI Calculator
Calculate the Equated Monthly Installment (EMI) for any loan. Enter the loan amount, interest rate, and tenure to see your fixed monthly payment, total interest, and total cost over the life of the loan.
EMI stands for Equated Monthly Installment. It is the fixed amount you pay each month to repay a loan over a set period. The EMI formula is: EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the principal, r is the monthly interest rate, and n is the total number of monthly installments.
Each EMI payment contains two components: interest and principal repayment. In the early months, a larger portion goes toward interest. As the outstanding balance decreases, more of each payment goes toward principal. This is the standard amortization pattern used by banks worldwide.
For example, a $500,000 loan at 8.5% for 20 years (240 months) has an EMI of about $4,339. Over the full term, you would pay approximately $541,350 in interest, making the total cost $1,041,350. That means you pay more than double the original loan amount when you include interest.
The three levers you can pull to reduce your EMI are: borrow less, get a lower rate, or extend the tenure. Extending tenure lowers your monthly payment but increases total interest significantly. A shorter tenure means higher monthly payments but much less total interest paid.