EMI Calculator: The Formula Behind Every Loan's Monthly Payment

Every loan’s EMI comes from the same formula — whether it’s a home loan, car loan, personal loan, or business loan. On a ₹10,00,000 loan at 9.5% for 5 years, the EMI is ₹21,002/month, totalling ₹12,60,112 over the loan — ₹2,60,112 of that is interest.

The EMI formula, explained plainly

EMI = P × r × (1+r)ⁿ / [(1+r)ⁿ − 1], where P is your loan amount, r is your monthly interest rate (annual rate ÷ 12 ÷ 100), and n is your total number of monthly instalments. It’s called the reducing-balance method because interest each month is calculated only on what you still owe, not the original loan amount — which is why a fixed EMI still results in more of each payment going to principal as the loan ages.

Worked example, step by step

Loan amount ₹10,00,000, interest rate 9.5%, tenure 5 years (60 months):

• Monthly interest rate: 9.5% ÷ 12 = 0.7917%
• Monthly EMI: ₹21,002
• Total paid over 5 years: ₹12,60,112
• Total interest paid: ₹2,60,112

Why use a generic EMI calculator instead of a loan-specific one?

The math is identical for every loan type, so a generic EMI calculator is genuinely useful any time you want to quickly check “what would the EMI be” for an amount, rate, and tenure combination that doesn’t map neatly to a specific loan category — comparing a quote, sanity- checking a number someone gave you, or planning before you’ve decided which type of loan you actually need. For a loan you’ve already picked, our purpose-built Home Loan, Car Loan, and Personal Loan EMI calculators add loan-specific context on top of the same core math.