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Loan EMI Calculator
Estimate Payments for Home, Car & Personal Loans
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Payable
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Principal
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Principal Amount
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Total Interest
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Monthly EMI
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How is Loan EMI Calculated?
Equated Monthly Installment (EMI) is the fixed amount you pay to the bank every month to repay your loan. It consists of two components: the Principal (the loan amount) and the Interest (the cost of borrowing).
📌 Formula Used
The standard mathematical formula for EMI calculation is:
E = P x R x (1+R)^N / [(1+R)^N-1]
- P: Principal Loan Amount
- R: Monthly Interest Rate (Annual Rate / 12 / 100)
- N: Loan Tenure in Months
📊 Interest Rate Comparison (2025 Estimates)
| Loan Type | Avg Interest Rate | Max Tenure |
|---|---|---|
| Home Loan | 8.50% – 9.50% | 30 Years |
| Car Loan | 8.75% – 11.00% | 7 Years |
| Personal Loan | 10.50% – 16.00% | 5 Years |
| Education Loan | 9.00% – 12.00% | 15 Years |
❓ Frequently Asked Questions
How can I reduce my EMI?
You can reduce your EMI by making a larger down payment (reducing the loan amount), negotiating a lower interest rate, or opting for a longer tenure (though this increases the total interest paid).
Does EMI change if interest rates change?
Yes, if you have a Floating Rate loan (common for home loans), your EMI or tenure may increase if the RBI raises the Repo Rate. Fixed Rate loans have constant EMIs.
What is the “reducing balance” method?
Most banks use the reducing balance method. This means interest is calculated on the outstanding loan balance at the end of every month, not on the original principal. Our calculator uses this accurate method.
Is prepaying a loan a good idea?
Generally, yes. Prepaying (making extra payments) reduces your outstanding principal directly, which significantly lowers the total interest burden over the loan term.
Can I calculate EMI for a 20-year loan?
Yes, simply select “Years” in the tenure toggle and enter “20”. The calculator automatically converts it to 240 months for the calculation.