Loan EMI Calculator
Enter your loan amount, annual interest rate, and repayment term to see your monthly payment, the total interest you will pay, and a year-by-year paydown table. Add an overpayment to see how much interest you save. Nothing uploaded.
Year-by-year breakdown
Learn more: loan EMI and interest calculations
The real cost of a loan - what your bank hopes you do not see
A £15,000 car loan at 7% APR over 5 years has a monthly payment of £297. That sounds manageable. What is less obvious is that you will pay £2,820 in interest on top - money that goes to the lender, not toward owning the car. On a mortgage the numbers are far more stark: a £200,000 mortgage at 4.5% over 25 years costs around £130,000 in interest. Understanding the full cost of a loan and how small extra payments can shrink that cost is one of the most valuable pieces of personal finance knowledge you can have.
How EMI is calculated and why it matters
EMI stands for Equated Monthly Instalment - the fixed amount you pay each month to repay a loan. It is calculated using the formula: EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the principal, r is the monthly interest rate (annual rate / 12 / 100), and n is the number of months. The formula ensures that each payment covers interest and principal, with early payments going mostly to interest and later payments going mostly to principal.
Amortisation and overpayment savings
An amortisation schedule shows the split between principal and interest for each payment over the life of the loan. Yes, overpaying a loan saves money significantly. Extra payments reduce your principal faster, which means less interest accrues in subsequent months. On a £10,000 loan at 5% over 36 months, an extra £50 each month saves roughly £200 in interest and pays the loan off 6 months early.
FAQ
What is EMI and how is it calculated?
EMI stands for Equated Monthly Instalment - the fixed amount you pay each month to repay a loan. It is calculated using the formula: EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the principal, r is the monthly interest rate (annual rate / 12 / 100), and n is the number of months.
How much interest do I pay on a loan?
Total interest depends on principal, rate, and term. A £10,000 loan at 5% over 3 years costs about £788 in interest (total repaid £10,788). The same loan over 5 years costs £1,323 in interest. Longer terms lower your monthly payment but increase total cost significantly.
Does overpaying a loan save money?
Yes - significantly. Extra payments go directly to principal, reducing the balance on which interest accrues. On a £10,000 loan at 5% over 36 months, an extra £50/month saves roughly £200 in interest and pays the loan off 6 months early. The calculator shows exactly how much you save for any overpayment amount.