Guide
How to calculate EMI on any loan
·5 min read
EMI (Equated Monthly Installment) is the fixed monthly payment you make on a loan. Banks structure EMIs so each payment covers a mix of interest and principal — at the start, mostly interest; over time, mostly principal.
The formula: EMI = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1) where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of months.
Example: For a ₹10,00,000 home loan at 8.5% per year for 20 years: r = 8.5/12/100 = 0.00708, n = 240 EMI ≈ ₹8,678 per month, with total interest of ₹10,82,768 over the tenure.
Use the EMI Calculator at /tools/emi-calculator to compare offers from different lenders. Even a 0.25% change in interest rate can save you tens of thousands over a 20-year loan.