Before you sign a loan agreement, there are three numbers you need to know:
- Monthly EMI — so you know if you can actually afford it
- Total interest paid — so you know the real cost of the loan
- Maximum loan on your budget — so you go in with the right number
Banks quote your monthly payment. They rarely lead with the total interest over 20 years. That number is often more than the loan principal itself.
What is EMI?
EMI stands for Equated Monthly Installment. It's a fixed amount you pay every month until the loan is fully repaid. Each payment covers two things:
- Interest on the remaining principal
- Principal repayment — reducing the loan balance
Early in the loan, most of your payment goes toward interest. In later years, it shifts toward principal. This is why paying off a loan early saves significant money.
The formula (so you know what's being calculated)
EMI = P × r × (1+r)^n / ((1+r)^n − 1)
Where:
- P = principal loan amount
- r = monthly interest rate = annual rate ÷ 12 ÷ 100
- n = tenure in months
You don't need to calculate this manually. The EMI Calculator does it instantly and shows your full amortization schedule alongside the result.
Standard EMI calculation — a real example
Loan: ₹10,00,000
Interest rate: 8.5% per year
Tenure: 20 years (240 months)
Monthly EMI: ₹8,678
Total payment over 20 years: ₹20,82,720
Total interest paid: ₹10,82,720 — more than the principal
The bank lends you ₹10L and you pay back ₹20.8L. The extra ₹10.8L is the cost of borrowing over 20 years.
How to calculate it
- Open the free EMI calculator online
- Enter your Loan Amount — use the currency toggle for ₹ or $
- Enter the Annual Interest Rate as a percentage
- Enter Tenure in Years
- See your EMI, total interest, and principal vs interest split chart instantly
Reverse EMI — "How much can I borrow?"
Most calculators answer: "I want ₹X. What's my EMI?"
The more useful question before approaching a bank is: "I can pay ₹X/month. What's the maximum loan I can get?"
The Affordability tab answers this.
Example:
Monthly budget: ₹20,000
Interest rate: 8.5%
Tenure: 20 years
Maximum loan you can afford: ~₹23,02,000
This is the number to take to the bank. You negotiate knowing your ceiling, not guessing at it.
Amortization schedule — year by year
The amortization table shows exactly how each year's payments break down between principal and interest:
| Year | Opening Balance | Principal Paid | Interest Paid | Closing Balance |
|---|---|---|---|---|
| 1 | ₹10,00,000 | ₹28,000 | ₹76,000 | ₹9,72,000 |
| 5 | ₹8,54,000 | ₹38,000 | ₹66,000 | ₹8,16,000 |
| 10 | ₹6,71,000 | ₹57,000 | ₹47,000 | ₹6,14,000 |
| 15 | ₹4,23,000 | ₹78,000 | ₹26,000 | ₹3,45,000 |
| 20 | ₹1,03,000 | ₹95,000 | ₹9,000 | ₹0 |
Notice: Year 1 you pay ₹76K interest and ₹28K principal. Year 20 it flips — ₹95K principal and only ₹9K interest. This is how all amortized loans work.
Prepayment — what extra monthly payments actually save you
Adding ₹5,000/month as a prepayment on the same ₹10L loan at 8.5% for 20 years:
- Without prepayment: 240 months, ₹10.82L total interest
- With ₹5,000/month extra: ~156 months, ₹6.8L total interest
Result: save ₹4L in interest and close the loan 84 months (7 years) early by paying ₹5,000 more per month.
Enter your extra payment in the calculator to see the exact savings and months saved for your specific loan.
Comparing two loans side by side
The Compare Loans tab evaluates two options at once:
| Loan A (8.5%) | Loan B (9.0%) | |
|---|---|---|
| Principal | ₹50,00,000 | ₹50,00,000 |
| Monthly EMI | ₹43,391 | ₹44,986 |
| Total Interest | ₹54.1L | ₹57.9L |
| Total Payment | ₹104.1L | ₹107.9L |
A 0.5% rate difference costs ₹3.8L more in interest over 20 years. Small rate differences compound significantly on long tenures — this comparison makes that visible before you commit.
Which loan types does it work for?
The formula is identical for all loan types. Just enter your numbers:
- Home loan / mortgage
- Car loan
- Personal loan
- Business loan
- Education loan
The currency toggle supports ₹ INR and $ USD. The loan news section at the bottom shows current rates for India and USA, updated weekly.
The full tool is live at EMI Calculator — monthly EMI, reverse affordability, full amortization schedule, prepayment impact, and loan comparison in one free calculator.
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