EMI Calculator

How EMI is calculated

This calculator uses the standard EMI formula: EMI = [P × R × (1 + R)^N] / [(1 + R)^N − 1], where P is the principal (loan amount), R is the monthly interest rate (your annual rate divided by 12 and by 100), and N is the number of monthly installments (tenure in months). Each month's interest is charged on the balance still outstanding, which is why early EMIs are interest-heavy and later ones are increasingly principal-heavy, even though the EMI amount itself stays the same throughout the loan.

Worked example

Take a loan of ₹5,00,000 at 10% annual interest over 5 years (60 months). The monthly interest rate works out to 10 ÷ 12 ÷ 100 = 0.833%. Plugging these into the formula above gives an EMI of approximately ₹10,624 per month. Over 60 months, you'd pay a total of about ₹6,37,411 — that's the original ₹5,00,000 principal plus roughly ₹1,37,411 in total interest. In the first EMI, around ₹4,167 goes toward interest and the remaining ₹6,457 reduces the principal; by the last few EMIs, that split is almost entirely reversed, with most of the payment going toward principal.

When a floating rate is reset

On a floating-rate loan the interest rate moves with a benchmark, and when it rises the lender can raise the EMI, add months, or both. RBI's rules for resetting floating rates on EMI loans cover loans to individuals, home, vehicle and education loans included. The lender has to:

• explain at sanction how a change in the benchmark can change your EMI, your tenure or both, and tell you straight away when either goes up;
• let you choose, at a reset, between a higher EMI, a longer tenure or a mix of the two, and let you prepay in part or in full at any point;
• never stretch the tenure so far that the EMI stops covering the month's interest (negative amortisation);
• send a statement every quarter with the principal and interest repaid so far, the EMI, the number of EMIs left and the annualised rate (APR).

A switch to a fixed rate at a reset used to be something every lender had to offer. Since 1 October 2025 it is at the lender's option, so check your sanction letter.

What the choice is worth. Take this page's default loan and a reset from 10% to 10.5% after 12 EMIs, when ₹4,18,865.94 is still owed. Finishing on time needs an EMI of ₹10,724.38, ₹100.86 more; keeping the old EMI adds one month. Total interest becomes ₹1,42,253 with the higher EMI and ₹1,43,448 with the longer tenure, against ₹1,37,411 before the reset. On a long loan the gap is far wider. The ₹40 lakh, 20-year loan in the home loan guide, reset from 8.5% to 9.5% after 36 EMIs, needs ₹37,012 a month (₹2,299 more) to finish on time. At the old EMI it runs 39 months longer, 23 years 3 months in all, and costs ₹8,84,427 more in interest than taking the higher EMI. To see the higher-EMI figure for your own loan, enter the amount still owed, the new rate and the months left.

Prepaying a floating-rate loan

Under RBI's Pre-payment Charges on Loans Directions, 2025, a bank, co-operative bank or NBFC (housing finance companies included) cannot charge anything for prepaying a floating-rate loan taken by an individual for a non-business purpose: not for part or full prepayment, not whatever the source of the money, and with no lock-in period. That covers loans sanctioned or renewed from 1 January 2026. Earlier RBI instructions, which these Directions replace, already barred banks from such charges on floating-rate home loans from 2012 and on floating-rate term loans to individual borrowers from 2014. Fixed-rate and business loans can still carry a prepayment charge, and it has to be stated in the sanction letter, the loan agreement and the Key Facts Statement.

What a prepayment does. On the default loan, ₹50,000 paid just after the 12th EMI, with the EMI kept at ₹10,623.52, ends the loan after 54 EMIs instead of 60 (the last one ₹1,695.54) and saves ₹22,669 of interest. Keeping the tenure instead lowers the EMI to ₹9,355.39, which you can check by entering ₹3,68,865.94 at 10% for 48 months, and saves ₹10,870. Keeping the EMI saves about twice as much.

Frequently Asked Questions