How the EMI is worked out
Each equated monthly instalment (EMI) is calculated as P × r × (1 + r)n ÷ ((1 + r)n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly instalments.
Early EMIs are mostly interest and later ones mostly principal, but the instalment itself stays the same each month. A longer tenure lowers the EMI but raises the total interest — worth testing before you commit.
Financing equipment, a vehicle or premises for your business? Keep the loan, its interest and the asset in proper books with our online accounting software, and reconcile every instalment with bank reconciliation.
FAQs
How is EMI calculated?
EMI uses the formula P × r × (1+r)^n ÷ ((1+r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly instalments. This calculator applies it for you.
What is the total interest I will pay?
It is the total of all EMIs minus the loan amount. The calculator shows both the total interest and the total amount payable over the full tenure.
Does a longer tenure reduce my EMI?
Yes — a longer tenure lowers the monthly EMI but usually increases the total interest you pay over the life of the loan. Try different tenures to see the trade-off.
Is this a reducing-balance EMI?
Yes. It assumes a standard reducing-balance loan at a fixed interest rate, which is how most business and personal loans in India are structured.
Is the calculator free?
Yes, completely free and with no sign-up. It is a general estimate — your bank's actual EMI may differ slightly due to processing fees, rounding or the interest-calculation method.