EMI Calculator — Monthly Loan Payment Calculator (Free)
About This Tool
The EMI Calculator helps you calculate your Equated Monthly Installment for any loan — home loan, car loan, or personal loan. Enter your loan amount, interest rate, and tenure to instantly see your monthly EMI, total interest payable, and total amount. The visual chart shows the principal vs interest split, and the amortization schedule provides a month-by-month breakdown of your payments.
How to Use
- Enter your loan amount in rupees
- Enter the annual interest rate offered by your bank
- Select loan tenure in years or months
Detailed Explanation & Worked Example
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 paid off in full.
The Standard EMI Mathematical Formula
The mathematical formula used to calculate EMI is:
EMI = P × r × (1 + r)^n / ((1 + r)^n - 1)
Where:
- P (Principal): The total amount you borrow (loan amount).
- r (Monthly Interest Rate): Calculated as the annual interest rate divided by 12 and then divided by 100. For instance, if the annual rate is 12%, then
r = 12 / (12 × 100) = 0.01. - n (Number of Monthly Installments): The loan tenure represented in months. For example, a 5-year tenure equals
5 × 12 = 60months.
Step-by-Step Worked Example
Let's say you borrow $100,000 (or equivalent currency) at an annual interest rate of 12% for a tenure of 1 year (12 months):
- Convert interest rate to monthly decimal:
r = 12 / (12 × 100) = 0.01 - Set months tenure:
n = 12 - Apply formula:
EMI = 100,000 × 0.01 × (1 + 0.01)^12 / ((1 + 0.01)^12 - 1) - Calculate power term:
(1.01)^12 ≈ 1.1268 - Evaluate EMI:
EMI = 100,000 × 0.01 × 1.1268 / (1.1268 - 1) = 1126.8 / 0.1268 ≈ 8,885 - You will pay $8,885 per month. The total payback amount is
8,885 × 12 = $106,620, which means your total interest paid is $6,620.