🏦 EMI Calculator with Prepayment

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How Is EMI Calculated?

EMI (equated monthly instalment) is the fixed monthly payment that repays a loan with interest. Banks use EMI = P × R × (1+R)^N ÷ [(1+R)^N − 1], where P is the loan, R the monthly rate and N the number of months. A 2,000,000 loan at 12% for 5 years costs 44,489 a month.

The EMI Formula

EMI = [P × R × (1+R)^N] ÷ [(1+R)^N − 1]

P is the principal, R is the monthly interest rate (annual rate ÷ 12 ÷ 100) and N is the number of monthly instalments. This is the standard reducing-balance method.

Worked Example

Borrow 2,000,000 at 12% a year for 5 years (60 months). The monthly rate is 1%, so the EMI is 44,489. Over the loan you repay 2,669,334, of which 669,334 is interest.

EMI on a 1,000,000 Loan at 12%

A longer tenure cuts the monthly payment but multiplies the interest: stretching this loan from 5 to 20 years lowers the EMI by half yet costs almost five times as much interest. For other amounts, the EMI scales in proportion, so 5,000,000 costs five times these figures.

Home, Car and Personal Loans

The same formula works for a home loan, car loan or personal loan; only the rate and tenure change. Home loans usually run longest, so their total interest is highest. Many car and personal loans are quoted at a flat rate, so switch the loan type above to see the real cost. Enter amounts in dollars, pounds, euros, rupees or any other currency.

Reducing Balance vs Flat Rate

With reducing balance, interest is charged only on what you still owe, so the interest part of each EMI shrinks over time. With a flat rate, interest is charged on the full original amount for the whole tenure. That makes a flat rate far more expensive than it looks: over 5 years, a 10% flat rate costs about the same as a 17.3% reducing rate. Always ask a lender which method they use before comparing offers.

EMI Calculator with Prepayment

Enter an amount in Extra monthly prepayment (reducing-balance loans only) to see how much sooner the loan ends and how much interest you save. Adding 5,000 a month to the example loan above clears it in 53 months instead of 60 and saves 94,325 of interest. The tool models a fixed extra amount every month from the start, not a one-off lump sum; a lump sum saves more the earlier it is paid.

Before You Borrow

• Compare the total repayment, not just the monthly EMI.
• Ask about processing fees and any prepayment penalty, since both raise the true cost above the quoted rate.
• Use the amortization schedule to see how much of each year's payments is interest: early years are interest-heavy.

Check the EMI fits your pay with the salary tax calculator and the monthly budget calculator. To see the opposite side, money growing instead of owed, try the compound interest calculator, or read how to calculate loan EMI step by step. This calculator is for estimates only; confirm exact terms with your lender.

How to Use the EMI / Loan Calculator

1. Enter the loan amount, annual interest rate and tenure (in years or months).
2. Choose reducing balance (most bank loans) or flat rate.
3. Optionally add an extra monthly prepayment.
4. Read the monthly EMI, total interest and total payable, and open the year-by-year amortization table.

Who Uses the EMI / Loan Calculator?

• Home and car buyers: compare EMIs for different tenures before applying.
• Checking a quote: see whether a flat-rate offer costs more than it looks.
• Paying off early: see how much interest and time a prepayment saves.

How the EMI / Loan Calculator Saves You Time

The EMI formula involves powers and is easy to mistype; the amortization schedule would take a spreadsheet. Both appear instantly here.