How to use it
- Enter the loan amount in any currency.
- Enter the yearly interest rate offered by the bank.
- Enter the loan tenure in years or months.
- Read the monthly EMI, total interest and the year-by-year schedule.
Worked example
A loan of 500,000 at 10% a year for 5 years has a monthly rate of 10 ÷ 12 ÷ 100 = 0.00833 and 60 instalments. The formula gives an EMI of about 10,624. Over five years you pay about 637,411 in total, of which about 137,411 is interest.
How to lower your EMI or total interest
- Longer tenure lowers the EMI but increases the total interest you pay.
- Shorter tenure raises the EMI but saves interest overall.
- Prepayments early in the loan reduce the balance when interest is highest, which saves the most.
- A lower rate, even by 0.5%, makes a large difference on long home loans. Compare offers before you sign.
This calculator is for planning. The exact figures in your loan agreement can differ slightly because of rounding, fees and the lender's calculation method.
Frequently asked questions
What is EMI?
EMI stands for equated monthly instalment: the fixed amount you pay the lender every month until the loan is repaid. Each EMI covers that month's interest plus part of the principal.
Why is the interest higher in the early years?
Interest is charged on the remaining balance. At the start the balance is largest, so most of each EMI goes to interest; later, more of it goes to the principal.
Does this include processing fees or insurance?
No. It calculates the loan itself. Ask your lender for fees, insurance and taxes, which are added separately.
Is this calculator suitable for car and personal loans?
Yes. Any loan with a fixed interest rate and equal monthly payments uses the same formula, including home, car, bike, education and personal loans.
Which currency does it use?
Any. Enter the amount in your own currency (USD, PKR, INR, GBP…) and the results are in the same currency.
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