EMI Calculator
Work out a monthly instalment on a reducing-balance basis, and compare it against the same rate quoted flat.
Please note: An estimate, not a sanctioned offer. Processing fees, insurance bundled with the loan and any prepayment charge are excluded, and a floating rate will change the instalment or the tenure over time.
What the EMI Calculator does
An EMI is a fixed monthly payment covering interest and principal together, sized so the loan clears exactly at the end of the tenure. The instalment stays constant while its split shifts steadily from interest toward principal. What matters as much as the number is the convention behind the rate: the same headline percentage means very different money depending on whether interest is charged on the reducing balance or flat on the original amount, and this calculator prices both so a quote can be read for what it costs rather than what it says.
Formula
Reducing balance: EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)Flat rate: instalment = (P + P × R × T) ÷ nwhere r = annual rate ÷ 12 ÷ 100, n = tenure in months, R = annual rate as a decimal, T = tenure in years
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Loan amount | selected currency | Yes | Accepts more than 0. |
| Annual interest rate | % | Yes | — |
| Tenure | years or months | Yes | Accepts more than 0, up to 50. |
| Tenure given in | one of 2 options | Yes | — |
| How is the rate quoted? | one of 2 options | Yes | — |
| Extra paid each month | selected currency | Optional | Anything above the instalment. Leave blank if you will pay only the EMI. Accepts 0 or more. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Tenure given in and How is the rate quoted?.
- Enter Loan amount, Annual interest rate and Tenure.
- Optionally add Extra paid each month.
- Select Calculate.
Worked example
A ₹1,000,000 loan over 120 months quoted at 9% flat.
- Loan amount
- 1000000
- Rate
- 9
- Tenure
- 120 months
- Quoted
- Flat rate
- Currency
- INR
Instalment ₹15,833.33 a month against ₹12,667.58 on a reducing balance — ₹3,165.76 more for the same headline 9%, because a flat 9% costs what a reducing-balance loan at 14.51% would.
Frequently asked questions
What is the difference between a flat rate and a reducing balance rate?
A reducing-balance rate charges interest only on what you still owe, so the interest portion of each instalment falls as the loan is repaid. A flat rate charges interest on the original amount for the whole tenure, regardless of how much you have repaid. Because the two are quoted as the same kind of percentage, a flat quote looks cheaper than it is — switch the option above to see what a given flat rate actually costs on a reducing basis.
Why is my first EMI mostly interest?
Interest accrues on the outstanding balance, which is at its largest on day one. The instalment is fixed, so whatever is left after that month's interest goes to principal — a small amount early, a large amount late. The first and final EMI split above shows both ends.
When I prepay, should the tenure or the EMI come down?
Reducing the tenure saves considerably more interest, because the unchanged instalment keeps working against a smaller balance. Reducing the EMI improves monthly cash flow but leaves the term, and most of the interest, in place. The prepayment figures here assume the tenure comes down.
Does the EMI change if rates move?
On a fixed-rate loan, no. On a floating-rate loan lenders commonly hold the instalment steady and lengthen or shorten the tenure instead, which means a rate rise can quietly add years rather than change the monthly figure.
Should I use this or the loan calculator?
Use this one when the payment is monthly and you want the reducing-versus-flat comparison or the effect of paying extra. Use the loan calculator when repayments are fortnightly, weekly or quarterly, and the home loan calculator when you are starting from a property price and a deposit rather than a loan amount.
Method and sources
Method. Reducing balance uses the standard amortizing-loan formula. Flat rate applies the quoted percentage to the original principal for the whole tenure and divides evenly — the calculation lenders themselves use for a flat-rate product, not an approximation of it.
Assumptions
- The rate quoted, reducing or flat, holds for the entire tenure with no change and no missed payments.
- A prepayment is assumed to reduce the tenure immediately and in full — some lenders apply it differently or charge for it.
Limitations
- Processing fees and any insurance bundled into the loan are excluded unless you fold them into the principal yourself.
- On a floating-rate loan, lenders commonly hold the EMI steady and change the tenure instead — this calculator cannot predict when or by how much.