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CalculatorLoan & EMI Calculator
Enter a loan amount, an annual interest rate and a tenure to get the monthly instalment, the total interest over the life of the loan, and a year-by-year breakdown of how much of each payment goes to principal versus interest.
Monthly instalment (EMI)
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| Year | Principal paid | Interest paid | Balance remaining |
|---|
Where the EMI formula comes from
An EMI (equated monthly instalment) is the fixed payment that clears both the principal and every month's interest over the tenure, in equal amounts each month. Start from the idea that each month the outstanding balance earns interest at the monthly rate r (the annual rate ÷ 12 ÷ 100), and each payment first covers that interest, then reduces the balance. Solving that recurrence for a constant monthly payment E over n months gives:
E = P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1], where P is the principal, r is the monthly rate as a decimal, and n is the number of months.
The (1 + r)ⁿ term is compound growth doing its usual job: it is what the whole balance would grow to if nothing were repaid, and the formula spreads that growth evenly across every instalment instead of collecting it as one lump sum at the end.
Why the first payments are almost all interest
Interest is charged on whatever balance is still outstanding, and early on that balance is close to the full loan amount. On a 1,000,000 loan at 9% a year, the monthly rate is 0.75%, so the very first month's interest alone is 7,500 — out of an EMI of roughly 8,997, only about 1,497 actually reduces the balance. That ratio flips gradually: by the final year, almost the entire instalment is principal, because the balance left to charge interest on has shrunk to almost nothing.
How total interest explodes with tenure
Stretching the same loan over more years lowers the monthly payment, but it does not lower the cost proportionally — it raises it, because interest keeps accruing on a balance that shrinks more slowly. These figures are for the same 1,000,000 loan at a fixed 9% annual rate, computed with the formula above:
| Tenure | Monthly EMI | Total interest | Interest as % of loan |
|---|---|---|---|
| 5 years | 20,758 | 245,501 | 24.6% |
| 10 years | 12,668 | 520,109 | 52.0% |
| 15 years | 10,143 | 825,680 | 82.6% |
| 20 years | 8,997 | 1,159,342 | 115.9% |
| 25 years | 8,392 | 1,517,589 | 151.8% |
| 30 years | 8,046 | 1,896,641 | 189.7% |
Doubling the tenure from 10 to 20 years cuts the EMI by about 29% but more than doubles the total interest paid. The lower monthly payment is real, but it is bought by paying interest for twice as long on a balance that takes twice as long to fall — the two effects do not cancel out.
Questions people ask
Does this include processing fees or insurance?
No. The calculation is pure principal-and-interest amortisation. Lenders often add a processing fee, and sometimes bundle insurance into the EMI — both change the effective cost and are not included here because they vary by lender and are not part of the interest-rate mathematics.
What if my loan charges a flat rate instead of a reducing rate?
This calculator assumes a reducing-balance rate, where interest is charged only on what is still outstanding — the standard method for mortgages and most personal loans. A flat-rate loan charges interest on the original principal for the whole tenure, which produces a noticeably higher effective rate for the same advertised percentage.
Why does the yearly schedule's last balance not land exactly on zero?
Because the EMI itself is rounded to whole units for display while the underlying interest calculation is not, the very last instalment in a real loan is usually adjusted by the lender by a small amount to clear the balance exactly. This tool shows the theoretical balance, not that final rounding adjustment.
Can I use this for a loan already partly repaid?
Enter the remaining balance as the loan amount and the remaining tenure, and it works the same way — the formula only needs what is still owed, not the original amount borrowed.