Loan and EMI Calculator
Free to use. Runs in your browser: your files and text are not uploaded.
This tool gives general information only. It is not financial advice.
Enter a loan amount, interest rate and term to see the monthly payment, the total interest, and how the balance falls each year.
How to use it
- Type the loan amount.
- Type the yearly interest rate.
- Type the term in years. Use a decimal for part years: 2.5 is 30 months.
The formula
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
- P = loan amount
- r = monthly interest rate (yearly rate ÷ 12 ÷ 100)
- n = number of monthly payments
Worked example
A loan of 100,000 at 8.5% a year for 5 years:
- r = 8.5 ÷ 12 ÷ 100 = 0.0070833, n = 60
- Monthly payment = 2,051.65
- Total paid = 2,051.65 × 60 = 123,099.19
- Total interest = 23,099.19
How the term changes the cost
The same 1,000,000 loan at 9% a year:
| Term | Monthly payment | Total interest |
|---|---|---|
| 10 years | 12,667.58 | 520,109.29 |
| 20 years | 8,997.26 | 1,159,342.29 |
| 30 years | 8,046.23 | 1,896,641.42 |
Going from 20 to 30 years lowers the payment by about 950 a month and adds about 737,000 in interest.
Reducing balance and flat rate
This calculator uses the reducing-balance method, where interest is charged only on what you still owe. Banks use it for most home, car and personal loans. Some lenders quote a “flat rate”, charged on the full original amount for the whole term. A flat rate costs much more than the same number as a reducing-balance rate, so check which one you are being quoted.
Limits
- The interest rate is assumed to stay the same. Floating-rate loans change when the lender’s rate changes.
- Processing fees, insurance, taxes on fees, and prepayment charges are not included.
- Payments are assumed to be monthly, with the first one a month after the loan starts.
- Lenders round differently, so their figure may differ slightly from this one.
Frequently asked questions
What is EMI?
EMI stands for equated monthly instalment: the fixed amount you pay the lender each month. Each payment covers that month's interest and repays part of the loan.
How is EMI calculated?
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the monthly interest rate and n is the number of months.
Does a longer loan term cost more?
Yes. A longer term lowers the monthly payment but raises the total interest, because you owe the money for longer.