Move the sliders for loan amount, interest rate and tenure to compare offers from different lenders. The year-wise schedule shows how your outstanding balance falls over time.
EMI calculation formula
EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
- P
- Loan principal
- r
- Monthly interest rate, i.e. annual rate ÷ 12 ÷ 100
- n
- Tenure in months
Indian lenders use the reducing balance method: interest each month is charged only on the outstanding principal. Early EMIs are mostly interest; later EMIs are mostly principal.
A longer tenure lowers the EMI but increases the total interest you pay. A shorter tenure does the opposite.
Ways to reduce your EMI burden
Before you sign a loan agreement, compare the full cost, not just the EMI.
- Negotiate the interest rate; even 0.5% makes a noticeable difference on large loans.
- Check processing fees and prepayment charges along with the rate.
- Keep total EMIs under about 40% of your monthly take-home pay.
- Prepay whenever you have surplus funds to cut interest and tenure.