How is EMI calculated?

EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan, r the monthly rate and n the number of months. For 100,000 at 12% over 12 months: r = 0.01, (1.01)^12 = 1.1268, so EMI = 100,000 × 0.01 × 1.1268 ÷ 0.1268 = 8,885.

Why is my total interest more than half my loan amount?

Over long tenures (20+ years) at typical home loan rates, interest is charged on a slowly shrinking balance for a very long time. Shortening the tenure by even a few years, or making extra principal payments, cuts total interest far more than a small rate difference does.

Does a longer tenure always cost more?

In total interest, yes; in monthly payment, no. 100,000 at 10% costs 2,125 a month over 5 years and 1,322 over 10 — but total interest goes from about 27,500 to 58,600. The table above shows the pattern at four rates.

Does this include processing fees or insurance?

No — this is the EMI on the principal you enter, at the rate you enter. Add processing fees and any bundled insurance premium separately; lenders often quote an APR that folds these in, and the personal-loan calculator works one out from a fee.

Is EMI the same as a monthly loan payment?

Yes. EMI is the Indian banking term; elsewhere it is called the monthly payment or instalment. The formula is identical, which is why the mortgage, car-loan and personal-loan pages on this site give the same figure for the same inputs.

EMI Calculator (Loan EMI, Interest and Schedule)

Work out the monthly EMI on any loan, with the total interest, the working behind the formula and a year-by-year repayment schedule.

Inputs

CurrencyAuto (USD)

Loan amount

$520$515,500

Interest rate (annual)(%)

0 %20 %

Tenure(months)

12 months360 months

Include CalculateEveryday mark

Monthly EMI

$495

Total payment16% interest

Principal$25,000(84%)
Interest$4,702(16%)

Year-by-year breakdown

Year	Principal paid	Interest paid	Balance
1	$4,327	$1,613	$20,673
2	$4,640	$1,300	$16,032
3	$4,976	$965	$11,057
4	$5,335	$605	$5,721
5	$5,721	$219	$0.00

Total interest payable: $4,702
Total payment: $29,702
Loan amount: $25,000
Term: 5 years (60 payments)
Monthly rate (r): 7% ÷ 12 = 0.58333%
Working: (1 + r)^60 = 1.4176; payment = loan × r × 1.4176 ÷ 0.4176 = loan × 0.019801
Interest as a share of all payments: 16%

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What each EMI input means

Loan amount: The amount you borrow — the sanctioned loan, not the price of what you are buying. Leave out any down payment.
Interest rate (annual): The yearly interest rate on the loan agreement, as a reducing-balance rate. If a lender quotes a 'flat' rate, it is not the same thing — ask for the reducing-balance rate or the APR.
Tenure: Number of monthly instalments: 60 for 5 years, 240 for 20. The EMI falls as this rises, but total interest rises faster.

EMI formula

EMI = P × r × (1 + r)^n / ((1 + r)^n − 1), with r = annual rate ÷ 12 ÷ 100 and n = months

EMI = \dfrac{P \times r \times (1+r)^n}{(1+r)^n - 1}

An EMI — equated monthly instalment — is the fixed monthly payment that repays a loan and its interest over a set number of months. The term comes from Indian banking, but the arithmetic is the same level-payment formula used for mortgages, car loans and personal loans everywhere, and OpenStax's Contemporary Mathematics derives it in its section on loans. P is the amount borrowed, r is the monthly interest rate (the annual rate divided by 12, as a decimal) and n is the number of months. Interest each month is charged only on what is still owed — the 'reducing balance' — so every EMI is the same size but its make-up changes: early payments are mostly interest, later ones mostly principal. The page shows the monthly rate, the growth factor (1 + r)^n and the multiplier the formula applies to the loan, so you can check the arithmetic, then the total interest, the interest share of everything you pay, and a year-by-year schedule of principal, interest and balance.

EMI worked example

A $25,000 loan at 7% over 5 years: r = 7 ÷ 12 ÷ 100 = 0.005833, and (1.005833)^60 = 1.4176. The EMI is 25,000 × 0.005833 × 1.4176 ÷ 0.4176, about $495 a month, with total interest close to $4,700 — roughly $29,700 repaid in all. Stretch the same loan to 7 years and the payment drops but the total interest climbs, which is the trade-off every term decision comes down to.

More EMI examples

The same $25,000 at 10% over just 2 years costs $1,154 a month, but total interest falls to about $2,687 — 10% of everything paid, against 16% on the five-year loan at 7%. A shorter term usually beats a lower rate on total cost.

Where the EMI calculator can give the wrong answer

A 0% interest rate is valid input and falls back to a straight-line EMI (principal ÷ tenure) rather than dividing by zero.
Prepayments and rate resets aren't modelled — this gives the EMI for a fixed-rate loan with no part-payments, which is the figure a lender quotes at sanction, not what you'll actually pay if you prepay. The amortization calculator handles extra payments.
Floating-rate loans change the EMI or the tenure whenever the lender's benchmark rate moves; re-run this with the new rate to see the effect.
Lenders round the EMI, usually to the nearest whole unit of currency, and adjust the last instalment so the loan closes exactly; a statement can differ by a little in the final month.
A 'flat rate' quote charges interest on the original amount for the whole term. A 10% flat rate over 3 years costs about as much as an 18% reducing-balance rate, so never enter a flat rate here.

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EMI reference table

EMI per 100,000 borrowed, by rate and term
Rate	3 years	5 years	10 years	20 years
6%	3,042	1,933	1,110	716
8%	3,134	2,028	1,213	836
10%	3,227	2,125	1,322	965
12%	3,321	2,224	1,435	1,101

Source: Computed with the formula above; the same in any currency

EMI FAQ

: EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan, r the monthly rate and n the number of months. For 100,000 at 12% over 12 months: r = 0.01, (1.01)^12 = 1.1268, so EMI = 100,000 × 0.01 × 1.1268 ÷ 0.1268 = 8,885.
: Over long tenures (20+ years) at typical home loan rates, interest is charged on a slowly shrinking balance for a very long time. Shortening the tenure by even a few years, or making extra principal payments, cuts total interest far more than a small rate difference does.
: In total interest, yes; in monthly payment, no. 100,000 at 10% costs 2,125 a month over 5 years and 1,322 over 10 — but total interest goes from about 27,500 to 58,600. The table above shows the pattern at four rates.
: No — this is the EMI on the principal you enter, at the rate you enter. Add processing fees and any bundled insurance premium separately; lenders often quote an APR that folds these in, and the personal-loan calculator works one out from a fee.
: Yes. EMI is the Indian banking term; elsewhere it is called the monthly payment or instalment. The formula is identical, which is why the mortgage, car-loan and personal-loan pages on this site give the same figure for the same inputs.