In short
EMI (equated monthly instalment) is the fixed amount you pay every month to repay a loan. For a ₹5 lakh car loan at 9% for 5 years the EMI is about ₹10,379 a month, and you pay roughly ₹1.23 lakh in interest over the loan. A ₹30 lakh home loan at 8.5% for 20 years costs about ₹26,035 a month and ₹32.5 lakh in total interest — more than the loan itself.
How the EMI calculator works
The calculator uses the standard reducing-balance EMI formula that every Indian bank uses:
EMI = 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. Total interest = EMI × n − P.
Use the preset buttons for typical car, home, personal and credit-card loans, then adjust the sliders to match your actual offer. The "interest as % of loan" figure shows how much extra you are really paying.
Key facts
| Home loan rates (2026) | About 8.25% – 9.5% p.a. |
|---|---|
| Car loan rates | About 8.5% – 11% p.a. |
| Personal loan rates | About 10.5% – 24% p.a. |
| Credit card interest | About 36% – 45% p.a. (3–3.75% per month) |
| Processing fee | Usually 0.5% – 2% of the loan amount |
| Prepayment penalty | Nil on floating-rate home loans; 2–5% on many personal loans |
Frequently asked questions
How is EMI calculated?
EMI = P × r × (1+r)^n ÷ ((1+r)^n − 1), where P is the principal, r is the monthly interest rate and n is the number of months. The EMI stays the same every month, but early instalments are mostly interest and later ones mostly principal.
Does a longer tenure reduce the EMI?
Yes, a longer tenure lowers the monthly EMI but increases the total interest you pay. A ₹30 lakh loan at 8.5% costs about ₹32.5 lakh in interest over 20 years but only about ₹14 lakh over 10 years.
Is it better to prepay a loan or invest?
If the loan rate is higher than what you can safely earn by investing (for example a 14% personal loan or 40% credit card debt), prepaying almost always wins. For a cheap home loan at 8.5%, many people do both — keep investing and prepay when there is surplus.
What is the minimum due on a credit card?
Usually 5% of the outstanding bill. Paying only the minimum keeps you out of default but charges 36–45% a year on the rest, so a ₹50,000 bill can take years to clear. Always pay the full statement amount.
What is a good EMI-to-income ratio?
Banks generally allow total EMIs up to 40–50% of your take-home salary. A safer personal rule is to keep all EMIs under 30–35% of income.
Last reviewed: September 2026 · Educational estimate only, not financial advice. See Disclaimer.
