Loan EMI Calculator

EMI (Equated Monthly Installment) is the fixed amount paid by a borrower to a lender at a specified date each month. EMIs consist of both principal and interest components.

The formula to calculate EMI is:
EMI = [P × r × (1 + r)^n] ÷ [(1 + r)^n - 1]

Where:
P = Principal loan amount
r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
n = Loan tenure in months

Loan tenure has a significant impact on both your EMI amount and total interest paid:

- Shorter tenure: Higher EMI amount but lower total interest paid over the loan period.
- Longer tenure: Lower EMI amount but higher total interest paid over the loan period.

For example, a ₹10 lakh loan at 8% interest for 5 years will have a higher EMI but lower total interest compared to the same loan for 10 years.

An amortization schedule is a table that shows the complete breakdown of each loan payment, displaying how much goes toward the principal and interest each month. It also shows the remaining loan balance after each payment.

This schedule helps borrowers understand how their loan is being paid off over time and how the principal-to-interest ratio changes with each payment. Early in the loan term, a larger portion of each payment goes toward interest, while later payments have a higher proportion going toward the principal.

Yes, paying off your loan early typically saves on interest costs. There are two main ways to do this:

1. Make extra payments: Paying more than your required EMI, with the extra amount going toward reducing your principal.
2. Lump-sum prepayment: Making a one-time large payment toward your principal.

However, be aware that some lenders may charge prepayment penalties. Check your loan agreement or consult with your lender to understand any potential fees for early repayment.

Interest rate has a direct impact on your EMI amount:

- Higher interest rates lead to higher EMIs for the same loan amount and tenure.
- Lower interest rates result in lower EMIs for the same loan amount and tenure.

For example, a 1% increase in the interest rate can significantly increase your monthly payment and the total interest paid over the loan term. This calculator helps you compare different interest rate scenarios to understand their impact on your EMI and total repayment.