EMI Calculator
Calculate your Equated Monthly Installment (EMI) instantly. Whether you are taking a home loan, personal loan, or car loan, use this free online tool to determine your monthly payments and view your complete amortization schedule.
Quick Answer: How to calculate EMI
EMI is calculated using the formula: EMI = [P x R x (1+R)^N]/[(1+R)^N-1]. P is the principal loan amount, R is the monthly interest rate (Annual Rate / 12 / 100), and N is the exact loan tenure in months. To find your EMI instantly, use the calculator below.
$500,000
Annual percentage rate
240 total months
Equated Monthly Installment (EMI)
$4,339.12
Payable every month
Total Interest Payable
$541,388
Total Payment (Principal + Interest)
$1,041,388
Breakdown of Total Payment
48.0%
52.0%
Ad Space - auto
Understanding Different Types of Loans
Home Loan EMI
Home loans typically involve large principal amounts and long tenures (15 to 30 years). Because the tenure is so long, the amount of interest you pay over the life of the loan can sometimes exceed the principal amount itself.
Car Loan EMI
Auto loans generally span 3 to 7 years. Because cars depreciate in value rapidly, it is highly recommended not to stretch a car loan tenure too long, otherwise you risk being "underwater" (owing more than the car is worth).
Personal Loan EMI
Personal loans are unsecured, meaning they do not require collateral. Consequently, they carry significantly higher interest rates than home or auto loans. Tenures typically range from 1 to 5 years.
How the Amortization Schedule Works
When you first start paying your EMI, a massive portion of your monthly payment goes toward serving the Interest. Very little goes toward reducing the Principal (the actual amount you owe).
As the years go by, this ratio flips. Because your principal balance is slowly decreasing, the interest accrued each month decreases. Therefore, toward the end of your loan tenure, almost your entire EMI payment goes toward wiping out the principal. Click "Show Full Amortization Schedule" on the calculator above to see this mathematical flip in action.
Ad Space - auto
Frequently Asked Questions
What is an EMI?
EMI stands for Equated Monthly Installment. It is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. EMIs are used to pay off both interest and principal each month so that over a specified number of years, the loan is paid off in full.
How is EMI calculated? What is the EMI formula?
The mathematical formula for calculating EMI is: EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where P stands for the Principal amount, R represents the interest rate per month (annual interest rate / 12 / 100), and N is the number of monthly installments (loan tenure in years x 12).
What factors affect my EMI?
Your EMI depends on three main factors: 1) The Principal Loan Amount (a higher loan means a higher EMI), 2) The Interest Rate (a higher rate means a higher EMI and total interest paid), and 3) The Loan Tenure (a longer tenure reduces the monthly EMI but increases the total interest you will pay over the life of the loan).
What happens if I miss an EMI payment?
Missing an EMI payment is considered a default and can result in late payment penalty fees. More importantly, it negatively impacts your credit score, making it harder or more expensive to secure loans in the future. Repeatedly missing EMIs can lead to the lender repossessing the asset (like your home or car).
Can I use this for Home Loans and Personal Loans alike?
Yes! The mathematical formula for EMI remains the same whether it is a Home Loan, Car Loan, Personal Loan, or Education Loan. You simply need to plug in the specific principal amount, interest rate, and tenure offered by your bank.