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Loan / EMI calculator.

Enter your loan amount, interest rate, and term to find your monthly payment and total interest instantly.

How to calculate loan EMI

EMI stands for Equated Monthly Instalment — the fixed monthly payment a borrower makes to repay a loan over a set period. Each EMI consists of two parts: interest on the remaining balance and a portion that reduces the principal. Understanding how EMI is calculated helps you compare loan offers, plan your budget, and decide on the right loan term.

The EMI 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 total number of monthly payments (years × 12).

Worked examples

  • Mortgage: $300,000 at 6.5% for 30 years. Monthly rate = 0.5417%. n = 360. EMI = $1,896/month. Total interest paid: $382,633.
  • Car loan: $25,000 at 5.9% for 5 years. Monthly rate = 0.4917%. n = 60. EMI = $483/month. Total interest: $3,990.
  • Personal loan: $10,000 at 9% for 3 years. Monthly rate = 0.75%. n = 36. EMI = $318/month. Total interest: $1,449.

How amortization works

In the early months of a loan, most of your payment goes toward interest. As the principal decreases, the interest portion shrinks and more of each payment goes toward principal. This is called amortization. On a 30-year mortgage, you might pay mostly interest for the first 15 years before the principal starts shrinking meaningfully. Our calculator generates a full month-by-month amortization schedule so you can see exactly how this plays out.

Shorter term vs. lower payment

A shorter loan term means higher monthly payments but dramatically less total interest:

  • $200,000 at 6% for 30 years: $1,199/month, $231,677 total interest.
  • $200,000 at 6% for 15 years: $1,688/month, $103,788 total interest.

The 15-year loan costs $489 more per month but saves $127,889 in total interest. This trade-off is one of the most important financial decisions homebuyers make.

Tips for borrowers

  • Compare APR, not just the interest rate. APR includes fees and gives a truer cost of borrowing.
  • Make extra payments when possible. Even small extra payments toward principal can shave years off a mortgage and save thousands in interest.
  • Keep your EMI below 28–36% of gross income. This is the general guideline lenders use for approval, and it helps ensure you can comfortably afford the loan.

Frequently asked questions.

What is an EMI?

EMI (Equated Monthly Instalment) is the fixed amount you pay each month to repay a loan. It includes both the principal repayment and the interest for that month. Every EMI payment reduces your outstanding loan balance until it reaches zero at the end of the loan term.

What is the EMI formula?

EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P = loan principal, r = monthly interest rate (annual rate ÷ 12 ÷ 100), n = total number of monthly payments. For example, a $20,000 loan at 6% annual interest for 5 years: r = 0.005, n = 60.

How is total interest calculated on a loan?

Total Interest = (EMI × Number of Months) − Principal. This is the total amount you pay above the original loan amount. On a 30-year mortgage the total interest paid often exceeds the original principal, which is why paying extra on the principal early can save significant money.

What is the difference between fixed and reducing balance interest?

Fixed rate: the interest rate stays the same for the entire loan term. Reducing balance (most common): interest is charged on the outstanding principal, which decreases each month as you repay. The EMI formula uses the reducing balance method, which is standard for mortgages and personal loans.

How can I reduce the total interest paid on a loan?

Three main ways: (1) Make a larger down payment to reduce the principal. (2) Choose a shorter loan term — you pay more per month but far less total interest. (3) Make extra principal payments when possible — even small extra payments early in the loan save disproportionately in interest.

What is a $200,000 mortgage at 7% for 30 years?

EMI = 200000 × 0.005833 × (1.005833)^360 ÷ ((1.005833)^360 − 1) ≈ $1,330.60/month. Total paid = $1,330.60 × 360 = $478,916. Total interest = $478,916 − $200,000 = $278,916. You pay more in interest than the original loan amount over 30 years.

How does loan term affect EMI and total interest?

Longer term = lower EMI but much higher total interest. Shorter term = higher EMI but much lower total interest. A $100,000 loan at 6%: 10 years → EMI $1,110, total interest $33,224. 20 years → EMI $716, total interest $71,942. 30 years → EMI $600, total interest $115,838.

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