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.
Advanced options
Year-by-year breakdown
Learn more: how EMI and amortization work
The reducing-balance formula
The EMI is P x r x (1+r)^n / ((1+r)^n - 1). P is the amount borrowed, r is the annual rate divided by 12 and n is the number of monthly payments. A 20,000 loan at 8% over 48 months has r of about 0.667%, which gives an EMI of 488.26. You repay 23,436.41 in total, so the interest is 3,436.41.
Each month's interest is charged on the balance still owed. In month one that is 20,000 x 0.667%, or 133.33, so 27% of the first payment is interest and the rest is principal. The interest share falls every month. In year one you pay 1,440.31 in interest and 4,418.81 of principal, leaving a balance of 15,581.19.
Flat rate against reducing balance
Some lenders quote a flat rate, which charges interest on the whole loan for every payment and not on the shrinking balance. GiveWell's post on microfinance interest rates works through a loan quoted at 20% over 4 months, a nominal rate of 60% a year. Because the 20% is charged on the full loan, it says the real annual rate is 93%. On a 100 loan the borrower paid 20 in interest, against 12.80 on a declining balance.
This tool takes a reducing-balance annual rate. To check a flat-rate offer, try rates until the EMI shown matches the payment you were quoted. That rate is the comparable figure.
What an extra payment does
The overpayment is added to the EMI each month. Interest is taken first and the rest reduces the balance. On the example loan, an extra 100 a month pays it off in 39 months and not 48. Total interest falls by about 680.15.
FAQ
Why is the total interest so large on a long loan?
Interest is charged on the outstanding balance each month, so a longer term means more months with a large balance. A smaller EMI from a longer term almost always means more total interest.
What does an extra monthly payment change?
It lowers the balance faster, so less interest is charged in every later month. The tool shows the new payoff month and the interest saved against the original schedule.
How does a 0% loan work?
With no interest, the EMI is the amount borrowed divided by the number of months. The tool treats this case separately from the standard formula, which cannot divide by zero.