calculate-loan

01 Loan payments

EMI Calculator: How the Monthly Instalment of a Loan Is Calculated

Calculator No. 01-0018 · Updated · Formula and assumptions shown below

EMI (monthly instalment) 10,379.18
Total payable
622,750.80
= Emi (monthly instalment) × tenure
Total interest
122,750.80
= Total payable − loan amount
Loan amount
500000
Input
You enter
Loan amount, Interest rate per year (%), Tenure (months)
You get
EMI (monthly instalment), Total payable, Total interest
Rounding
2 dp

Estimate for education, not financial advice. The result follows from the numbers you enter and the formula shown. It is not a quote or an offer, and it does not include fees, taxes or insurance unless the calculator asks for them. Ask your lender for the exact figures.

This calculator works out the EMI, the equated monthly instalment that repays a loan in equal parts. Enter the loan amount in your currency, the annual interest rate and the tenure in months; you get the EMI, the total payable and the total interest.

Formula

EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1), which is the same as P × r ÷ (1 − (1 + r)−n). r is the annual rate ÷ 12 ÷ 100 and n the tenure in months.

Worked Example

A loan of 500,000 at 9% a year for 60 months.

  1. r = 9 ÷ 12 ÷ 100 = 0.0075; n = 60
  2. (1.0075)60 = 1.56568103
  3. EMI = 500,000 × 0.0075 × 1.56568103 ÷ 0.56568103 = 10,379.18
  4. Total payable = 10,379.18 × 60 = 622,750.80
  5. Total interest = 622,750.80 − 500,000 = 122,750.80

Assumptions

  • The payment is rounded to the cent and totals use the rounded payment; a lender’s final payment can differ by a few cents.
  • Reducing-balance method: interest each month is charged on the balance still owed.
  • Fixed rate, monthly compounding, no processing fee or insurance.

How to read the result

The EMI stays the same; the interest part falls and the principal part rises every month. The result is in the same currency as the amount you enter.

Limits and common mistakes

  • A “flat rate” quote is not the same as a reducing-balance rate; a flat rate of 9% costs much more than 9% reducing.
  • Processing fees and insurance are not included.

Frequently Asked Questions

Is EMI the same as a monthly loan payment?

Yes. EMI is the name used in India and some other countries for the level monthly payment.

Why does most of the first EMI go to interest?

Interest is charged on the full balance at first; as the balance falls, more of each EMI repays principal.

Can I use years instead of months?

Multiply years by 12 and enter the months.

Formula used
in p | Loan amount | - | 500000 | 1 | 10000000000
in apr | Interest rate per year | % | 9 | 0.01 | 100
in n | Tenure | months | 60 | 1 | 600
out emi | EMI (monthly instalment) | - | round(p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -n), 2) | 2
out tot | Total payable | - | emi * n | 2
out int | Total interest | - | tot - p | 2

Each line is one input (in, sel, list) or one result (out: label, unit, formula, decimals). How the calculators work

Method: the standard loan formula for this calculation, fixed rate and monthly compounding unless stated, rounded as each result states. Not financial advice; no lender, rate or product is recommended. See formulas and assumptions, the disclaimer or report an error.

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