EMI Calculator
An Equated Monthly Installment (EMI) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. EMIs are applied to both interest and principal each month so that over a specified number of years, the loan is fully paid off.
₹21,696
₹25,00,000
₹27,06,939
₹52,06,939
First 12 Months Amortization Schedule
| Month | Principal Paid | Interest Paid | Balance |
|---|---|---|---|
| 1 | ₹3,987 | ₹17,708 | ₹24,96,013 |
| 2 | ₹4,015 | ₹17,680 | ₹24,91,997 |
| 3 | ₹4,044 | ₹17,652 | ₹24,87,953 |
| 4 | ₹4,073 | ₹17,623 | ₹24,83,881 |
| 5 | ₹4,101 | ₹17,594 | ₹24,79,779 |
| 6 | ₹4,130 | ₹17,565 | ₹24,75,649 |
| 7 | ₹4,160 | ₹17,536 | ₹24,71,489 |
| 8 | ₹4,189 | ₹17,506 | ₹24,67,300 |
| 9 | ₹4,219 | ₹17,477 | ₹24,63,081 |
| 10 | ₹4,249 | ₹17,447 | ₹24,58,832 |
| 11 | ₹4,279 | ₹17,417 | ₹24,54,553 |
| 12 | ₹4,309 | ₹17,386 | ₹24,50,244 |
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How does the EMI Calculator Work?
An Equated Monthly Installment (EMI) 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 period, the loan is fully paid off.
The EMI Formula
The mathematical formula used to calculate EMIs is:
Where:
- P: Principal loan amount (the original sum borrowed).
- R: Monthly interest rate. It is calculated as
Annual Rate of Interest / 12 / 100. For instance, if the annual rate is 12%, R will be 12/12/100 = 0.01. - N: Number of monthly installments or loan tenure in months. For instance, a 5-year loan tenure has 5 x 12 = 60 installments.
Step-by-Step Worked Example
Let's say you take a personal loan of ₹1,00,000 (Principal P) at an annual interest rate of 12% (Annual Rate) for a tenure of 1 Year (12 months, N).
- Convert annual rate to monthly: R = 12 / 12 / 100 = 0.01.
- Number of months: N = 12.
- Apply the formula:
EMI = [1,00,000 x 0.01 x (1 + 0.01)^12] / [(1 + 0.01)^12 - 1]
EMI = [1,000 x 1.126825] / [1.126825 - 1]
EMI = 1,126.825 / 0.126825
EMI = ₹8,885(approx). - Total Amount Payable: ₹8,885 x 12 = ₹1,06,620.
- Total Interest Payable: ₹1,06,620 - ₹1,00,000 = ₹6,620.
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Frequently Asked Questions
Q.What is an EMI?
An Equated Monthly Installment (EMI) is a fixed payment made by a borrower to a lender at a specified date each calendar month.
Q.How is EMI calculated?
It is calculated using the formula: EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where P is Principal, R is monthly interest rate, and N is monthly tenure.
Q.Does prepaying a loan reduce the EMI?
Yes, prepaying a portion of the principal can either reduce your future EMI amount or shorten your loan tenure, depending on your choice.
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